国际金融英文版Chapter3课后答案

米什金货币金融学英文版习题答案chapter 3英文习题

Economics of Money, Banking, and Financial Markets, 11e, Global Edition (Mishkin) Chapter 3 What Is Money?3.1 Meaning of Money1) To an economist, ________ is anything that is generally accepted in payment for goods and services or in the repayment of debt.A) wealthB) incomeC) moneyD) creditAnswer: CAACSB: Application of Knowledge2) Money isA) anything that is generally accepted in payment for goods and services or in the repayment of debt.B) a flow of earnings per unit of time.C) the total collection of pieces of property that are a store of value.D) always based on a precious metal like gold or silver.Answer: AAACSB: Application of Knowledge3) Currency includesA) paper money and coins.B) paper money, coins, and checks.C) paper money and checks.D) paper money, coins, checks, and savings deposits.Answer: AAACSB: Analytical Thinking4) Even economists have no single, precise definition of money becauseA) money supply statistics are a state secret.B) the Federal Reserve does not employ or report different measures of the money supply.C) the "moneyness" or liquidity of an asset is a matter of degree.D) economists find disagreement interesting and refuse to agree for ideological reasons. Answer: CAACSB: Reflective Thinking5) The total collection of pieces of property that serve to store value is a person'sA) wealth.B) income.C) money.D) credit.Answer: AAACSB: Application of Knowledge6) A person's house is part of herA) money.B) income.C) liabilities.D) wealth.Answer: DAACSB: Analytical Thinking7) ________ is used to make purchases while ________ is the total collection of pieces of property that serve to store value.A) Money; incomeB) Wealth; incomeC) Income; moneyD) Money; wealthAnswer: DAACSB: Reflective Thinking8) ________ is a flow of earnings per unit of time.A) IncomeB) MoneyC) WealthD) CurrencyAnswer: AAACSB: Application of Knowledge9) An individual's annual salary is herA) money.B) income.C) wealth.D) liabilities.Answer: BAACSB: Analytical Thinking10) When we say that money is a stock variable, we mean thatA) the quantity of money is measured at a given point in time.B) we must attach a time period to the measure.C) it is sold in the equity market.D) money never loses purchasing power.Answer: AAACSB: Reflective Thinking11) The difference between money and income is thatA) money is a flow and income is a stock.B) money is a stock and income is a flow.C) there is no difference—money and income are both stocks.D) there is no difference—money and income are both flows.Answer: BAACSB: Reflective Thinking12) Which of the following is a TRUE statement?A) Money and income are flow variables.B) Money is a flow variable.C) Income is a flow variable.D) Money and income are stock variables.Answer: CAACSB: Reflective Thinking13) Which of the following statements uses the economists' definition of money?A) I plan to earn a lot of money over the summer.B) Betsy is rich—she has a lot of money.C) I hope that I have enough money to buy my lunch today.D) The job with New Company gave me the opportunity to earn more money.Answer: CAACSB: Analytical Thinking3.2 Functions of Money1) Of money's three functions, the one that distinguishes money from other assets is its function as aA) store of value.B) unit of account.C) standard of deferred payment.D) medium of exchange.Answer: DAACSB: Reflective Thinking2) If peanuts serve as a medium of exchange, a unit of account, and a store of value, then peanuts areA) bank deposits.B) reserves.C) money.D) loanable funds.Answer: CAACSB: Reflective Thinking3) ________ are the time and resources spent trying to exchange goods and services.A) Bargaining costsB) Transaction costsC) Contracting costsD) Barter costsAnswer: BAACSB: Application of Knowledge4) Compared to an economy that uses a medium of exchange, in a barter economyA) transaction costs are higher.B) transaction costs are lower.C) liquidity costs are higher.D) liquidity costs are lower.Answer: AAACSB: Reflective Thinking5) When compared to exchange systems that rely on money, disadvantages of the barter system includeA) the requirement of a double coincidence of wants.B) lowering the cost of exchanging goods over time.C) lowering the cost of exchange to those who would specialize.D) encouraging specialization and the division of labor.Answer: AAACSB: Reflective Thinking6) The conversion of a barter economy to one that uses moneyA) increases efficiency by reducing the need to exchange goods and services.B) increases efficiency by reducing the need to specialize.C) increases efficiency by reducing transactions costs.D) does not increase economic efficiency.Answer: CAACSB: Reflective Thinking7) Which of the following statements best explains how the use of money in an economy increases economic efficiency?A) Money increases economic efficiency because it is costless to produce.B) Money increases economic efficiency because it discourages specialization.C) Money increases economic efficiency because it decreases transactions costs.D) Money cannot have an effect on economic efficiency.Answer: CAACSB: Reflective Thinking8) When economists say that money promotes ________, they mean that money encourages specialization and the division of labor.A) bargainingB) contractingC) efficiencyD) greedAnswer: CAACSB: Reflective Thinking9) Money ________ transaction costs, allowing people to specialize in what they do best.A) reducesB) increasesC) enhancesD) eliminatesAnswer: AAACSB: Application of Knowledge10) For a commodity to function effectively as money it must beA) easily standardized, making it easy to ascertain its value.B) difficult to make change.C) deteriorate quickly so that its supply does not become too large.D) hard to carry around.Answer: AAACSB: Reflective Thinking11) All of the following are necessary criteria for a commodity to function as money EXCEPTA) it must deteriorate quickly.B) it must be divisible.C) it must be easy to carry.D) it must be widely accepted.Answer: AAACSB: Analytical Thinking12) Whatever a society uses as money, the distinguishing characteristic is that it mustA) be completely inflation proof.B) be generally acceptable as payment for goods and services or in the repayment of debt.C) contain gold.D) be produced by the government.Answer: BAACSB: Reflective Thinking13) All but the most primitive societies use money as a medium of exchange, implying thatA) the use of money is economically efficient.B) barter exchange is economically efficient.C) barter exchange cannot work outside the family.D) inflation is not a concern.Answer: AAACSB: Reflective Thinking14) Kevin purchasing concert tickets with his debit card is an example of the ________ function of money.A) medium of exchangeB) unit of accountC) store of valueD) specializationAnswer: AAACSB: Analytical Thinking15) When money prices are used to facilitate comparisons of value, money is said to function as aA) unit of account.B) medium of exchange.C) store of value.D) payments-system ruler.Answer: AAACSB: Analytical Thinking16) When there are many goods is that in a barter systemA) transactions costs are minimized.B) there exists a multiple number of prices for each good.C) there is only one store of value.D) exchange of services is impossible.Answer: BAACSB: Reflective Thinking17) In a barter economy the number of prices in an economy with N goods isA) [N(N - 1)]/2.B) N(N/2).C) 2N.D) N(N/2) - 1.Answer: AAACSB: Analytical Thinking18) If there are five goods in a barter economy, one needs to know ten prices in order to exchange one good for another. If, however, there are ten goods in a barter economy, then one needs to know ________ prices in order to exchange one good for another.A) 20B) 25C) 30D) 45Answer: DAACSB: Analytical Thinking19) If there are four goods in a barter economy, then one needs to know ________ prices in order to exchange one good for another.A) 8B) 6C) 5D) 4Answer: BAACSB: Analytical Thinking20) Because it is a unit of account, moneyA) increases transaction costs.B) reduces the number of prices that need to be calculated.C) does not earn interest.D) discourages specialization.Answer: BAACSB: Reflective Thinking21) Dennis notices that jackets are on sale for $99. In this case money is functioning as aA) medium of exchange.B) unit of account.C) store of value.D) payments-system ruler.Answer: BAACSB: Analytical Thinking22) As a store of value, moneyA) does not earn interest.B) cannot be a durable asset.C) must be currency.D) is a way of saving for future purchases.Answer: DAACSB: Analytical Thinking23) Patrick places his pocket change into his savings bank on his desk each evening. By his actions, Patrick indicates that he believes that money is aA) medium of exchange.B) unit of account.C) store of value.D) unit of specialization.Answer: CAACSB: Analytical Thinking24) ________ is the relative ease and speed with which an asset can be converted into a medium of exchange.A) EfficiencyB) LiquidityC) DeflationD) SpecializationAnswer: BAACSB: Application of Knowledge25) Increasing transactions costs of selling an asset make the assetA) more valuable.B) more liquid.C) less liquid.D) more moneylike.Answer: CAACSB: Reflective Thinking26) Since it does not have to be converted into anything else to make purchases, ________ is the most liquid asset.A) moneyB) stockC) artworkD) goldAnswer: AAACSB: Reflective Thinking27) Of the following assets, the least liquid isA) stocks.B) traveler's checks.C) checking deposits.D) a house.Answer: DAACSB: Analytical Thinking28) Ranking assets from most liquid to least liquid, the correct order isA) savings bonds; house; currency.B) currency; savings bonds; house.C) currency; house; savings bonds.D) house; savings bonds; currency.Answer: BAACSB: Analytical Thinking29) People hold money even during inflationary episodes when other assets prove to be better stores of value. This can be explained by the fact that money isA) extremely liquid.B) a unique good for which there are no substitutes.C) the only thing accepted in economic exchange.D) backed by gold.Answer: AAACSB: Reflective Thinking30) If the price level doubles, the value of moneyA) doubles.B) more than doubles, due to scale economies.C) rises but does not double, due to diminishing returns.D) falls by 50 percent.Answer: DAACSB: Analytical Thinking31) A fall in the level of pricesA) does not affect the value of money.B) has an uncertain effect on the value of money.C) increases the value of money.D) reduces the value of money.Answer: CAACSB: Analytical Thinking32) A hyperinflation isA) a period of extreme inflation generally greater than 50% per month.B) a period of anxiety caused by rising prices.C) an increase in output caused by higher prices.D) impossible today because of tighter regulations.Answer: AAACSB: Analytical Thinking。

托马斯国际金融课后习题答案解析

Suggested answers to questions and problems(in the textbook)Chapter 22. Disagree, at least as a general statement. One meaning of a current account surplusis that the country is exporting more goods and services than it is importing. Onemight easily judge that this is not good—the country is producing goods andservices that are exported, but the country is not at the same time getting theimports of goods and services that would allow it do more consumption anddomestic investment. In this way a current account deficit might be consideredgood—the extra imports allow the country to consume and invest domesticallymore than the value of its current production. Another meaning of a current account surplus is that the country is engaging in foreign financial investment—it is building up its claims on foreigners, and this adds to national wealth. This sounds good, but as noted above it comes at the cost of foregoing current domestic purchases ofgoods and services. A current account deficit is the country running down its claims on foreigners or increasing its indebtedness to foreigners. This sounds bad, but itcomes with the benefit of higher levels of current domestic expenditure. Differentcountries at different times may weigh the balance of these costs and benefitsdifferently, so that we cannot simply say that a current account surplus is better thana current account deficit.4. Disagree. If the country has a surplus (a positive value) for its official settlementsbalance, then the value for its official reserves balance must be a negative value of the same amount (so that the two add to zero). A negative value for this asset item means that funds are flowing out in order for the country to acquire more of these kinds of assets. Thus, the country is increasing its holdings of official reserve assets.6. Item e is a transaction in which foreign official holdings of U.S. assets increase. This isa positive (credit) item for official reserve assets and a negative (debit) item forprivate capital flows as the U.S. bank acquires pound bank deposits. The debit item contributes to a U.S. deficit in the official settlements balance (while the credit item is recorded "below the line," permitting the official settlements balance to be indeficit). All other transactions involve debit and credit items both of which areincluded in the official settlements balance, so that they do not directly contribute toa deficit (or surplus) in the official settlements balance.8. a. Merchandise trade balance: $330 - 198 = $132Goods and services balance: $330 - 198 + 196 - 204 = $124Current account balance: $330 - 198 + 196 - 204 + 3 - 8 = $119Official settlements balance: $330 - 198 + 196 - 204 + 3 - 8 + 102 - 202 + 4 = $23b. Change in official reserve assets (net) = - official settlements balance = -$23.The country is increasing its net holdings of official reserve assets.10. a. International investment position (billions): $30 + 20 + 15 - 40 - 25 = $0.The country is neither an international creditor nor a debtor. Its holding ofinternational assets equals its liabilities to foreigners.b. A current account surplus permits the country to add to its net claims onforeigners. For this reason the country's international investment position willbecome a positive value. The flow increase in net foreign assets results in the stock of net foreign assets becoming positive.Chapter 32. Exports of merchandise and services result in supply of foreign currency in theforeign exchange market. Domestic sellers often want to be paid using domesticcurrency, while the foreign buyers want to pay in their currency. In the process ofpaying for these exports, foreign currency is exchanged for domestic currency,creating supply of foreign currency. International capital inflows result in a supply of foreign currency in the foreign exchange market. In making investments in domestic financial assets, foreign investors often start with foreign currency and mustexchange it for domestic currency before they can buy the domestic assets. Theexchange creates a supply of foreign currency. Sales of foreign financial assets that the country's residents had previously acquired, and borrowing from foreigners by this country's residents are other forms of capital inflow that can create supply offoreign currency.4. The U.S. firm obtains a quotation from its bank on the spot exchange rate for buyingyen with dollars. If the rate is acceptable, the firm instructs its bank that it wants to use dollars from its dollar checking account to buy 1 million yen at this spotexchange rate. It also instructs its bank to send the yen to the bank account of the Japanese firm. To carry out this instruction, the U.S. bank instructs its correspondent bank in Japan to take 1 million yen from its account at the correspondent bank and transfer the yen to the bank account of the Japanese firm. (The U.S. bank could also use yen at its own branch if it has a branch in Japan.)6. The trader would seek out the best quoted spot rate for buying euros with dollars,either through direct contact with traders at other banks or by using the services of a foreign exchange broker. The trader would use the best rate to buy euro spot.Sometime in the next hour or so (or, typically at least by the end of the day), thetrader will enter the interbank market again, to obtain the best quoted spot rate for selling euros for dollars. The trader will use the best spot rate to sell her previously acquired euros. If the spot value of the euro has risen during this short time, thetrader makes a profit.8. a. The cross rate between the yen and the krone is too high (the yen value of the kroneis too high) relative to the dollar-foreign currency exchange rates. Thus, in aprofitable triangular arbitrage, you want to sell kroner at the high cross rate. Thearbitrage will be: Use dollars to buy kroner at $0.20/krone, use these kroner to buy yen at 25 yen/krone, and use the yen to buy dollars at $0.01/yen. For each dollarthat you sell initially, you can obtain 5 kroner, these 5 kroner can obtain 125 yen,and the 125 yen can obtain $1.25. The arbitrage profit for each dollar is therefore 25 cents.b. Selling kroner to buy yen puts downward pressure on the cross rate (the yenprice of krone). The value of the cross rate must fall to 20 (=0.20/0.01) yen/krone to eliminate the opportunity for triangular arbitrage, assuming that the dollar exchange rates are unchanged.10. a. The increase in supply of Swiss francs puts downward pressure on theexchange-rate value ($/SFr) of the franc. The monetary authorities must intervene to defend the fixed exchange rate by buying SFr and selling dollars.b. The increase in supply of francs puts downward pressure on the exchange-ratevalue ($/SFr) of the franc. The monetary authorities must intervene to defend thefixed exchange rate by buying SFr and selling dollars.c. The increase in supply of francs puts downward pressure on the exchange-ratevalue ($/SFr) of the franc. The monetary authorities must intervene to defend thefixed exchange rate by buying SFr and selling dollars.d. The decrease in demand for francs puts downward pressure on theexchange-rate value ($/SFr) of the franc. The monetary authorities must intervene to defend the fixed exchange rate by buying SFr and selling dollars.Chapter 42. You will need data on four market rates: The current interest rate (or yield) on bondsissued by the U.S. government that mature in one year, the current interest rate (or yield) on bonds issued by the British government that mature in one year, thecurrent spot exchange rate between the dollar and pound, and the current one-year forward exchange rate between the dollar and pound. Do these rates result in acovered interest differential that is very close to zero?4. a. The U.S. firm has an asset position in yen—it has a long position in yen. To hedge itsexposure to exchange rate risk, the firm should enter into a forward exchangecontract now in which the firm commits to sell yen and receive dollars at the current forward rate. The contract amounts are to sell 1 million yen and receive $9,000, both in 60 days.b. The student has an asset position in yen—a long position in yen. To hedge theexposure to exchange rate risk, the student should enter into a forward exchangecontract now in which the student commits to sell yen and receive dollars at thecurrent forward rate. The contract amounts are to sell 10 million yen and receive$90,000, both in 60 days.c. The U.S. firm has an liability position in yen—a short position in yen. To hedge itsexposure to exchange rate risk, the firm should enter into a forward exchangecontract now in which the firm commits to sell dollars and receive yen at the current forward rate. The contract amounts are to sell $900,000 and receive 100 million yen, both in 60 days.6. Relative to your expected spot value of the euro in 90 days ($1.22/euro), the currentforward rate of the euro ($1.18/euro) is low—the forward value of the euro isrelatively low. Using the principle of "buy low, sell high," you can speculate byentering into a forward contract now to buy euros at $1.18/euro. If you are correct in your expectation, then in 90 days you will be able to immediately resell those euros for $1.22/euro, pocketing a profit of $0.04 for each euro that you bought forward. If many people speculate in this way, then massive purchases now of euros forward(increasing the demand for euros forward) will tend to drive up the forward value of the euro, toward a current forward rate of $1.22/euro.8. a. The Swiss franc is at a forward premium. Its current forward value ($0.505/SFr) isgreater than its current spot value ($0.500/SFr).b. The covered interest differential "in favor of Switzerland" is ((1 + 0.005) (0.505) /0.500) - (1 + 0.01) = 0.005. (Note that the interest rate used must match the timeperiod of the investment.) There is a covered interest differential of 0.5% for 30 days(6 percent at an annual rate). The U.S. investor can make a higher return, coveredagainst exchange rate risk, by investing in SFr-denominated bonds, so presumably the investor should make this covered investment. Although the interest rate onSFr-denominated bonds is lower than the interest rate on dollar-denominatedbonds, the forward premium on the franc is larger than this difference, so that thecovered investment is a good idea.c. The lack of demand for dollar-denominated bonds (or the supply of these bondsas investors sell them in order to shift into SFr-denominated bonds) puts downward pressure on the prices of U.S. bonds—upward pressure on U.S. interest rates. Theextra demand for the franc in the spot exchange market (as investors buy SFr inorder to buy SFr-denominated bonds) puts upward pressure on the spot exchange rate. The extra demand for SFr-denominated bonds puts upward pressure on theprices of Swiss bonds—downward pressure on Swiss interest rates. The extra supply of francs in the forward market (as U.S. investors cover their SFr investments backinto dollars) puts downward pressure on the forward exchange rate. If the only rate that changes is the forward exchange rate, this rate must fall to about $0.5025/SFr.With this forward rate and the other initial rates, the covered interest differential is close to zero.10. In testing covered interest parity, all of the interest rates and exchange rates that areneeded to calculate the covered interest differential are rates that can observed inthe bond and foreign exchange markets. Determining whether the covered interest differential is about zero (covered interest parity) is then straightforward (although some more subtle issues regarding timing of transactions may also need to beaddressed). In order to test uncovered interest parity, we need to know not onlythree rates—two interest rates and the current spot exchange rate—that can beobserved in the market, but also one rate—the expected future spot exchangerate—that is not observed in any market. The tester then needs a way to find outabout investors' expectations. One way is to ask them, using a survey, but they may not say exactly what they really think. Another way is to examine the actualuncovered interest differential after we know what the future spot exchange rateactually turns out to be, and see whether the statistical characteristics of the actualuncovered differential are consistent with an expected uncovered differential ofabout zero (uncovered interest parity).Chapter 52. a. The euro is expected to appreciate at an annual rate of approximately ((1.005 -1.000)/1.000)⋅(360/180)⋅100 = 1%. The expected uncovered interest differential isapproximately 3% + 1% - 4% = 0, so uncovered interest parity holds (approximately).b. If the interest rate on 180-day dollar-denominated bonds declines to 3%, then thespot exchange rate is likely to increase—the euro will appreciate, the dollardepreciate. At the initial current spot exchange rate, the initial expected future spot exchange rate, and the initial euro interest rate, the expected uncovered interestdifferential shifts in favor of investing in euro-denominated bonds (the expecteduncovered differential is now positive, 3% + 1% - 3% = 1%, favoring uncoveredinvestment in euro-denominated bonds. The increased demand for euros in thespot exchange market tends to appreciate the euro. If the euro interest rate and the expected future spot exchange rate remain unchanged, then the current spot ratemust change immediately to be $1.005/euro, to reestablish uncovered interestparity. When the current spot rate jumps to this value, the euro's exchange ratevalue is not expected to change in value subsequently during the next 180 days. The dollar has depreciated immediately, and the uncovered differential then again iszero (3% + 0% - 3% = 0).4. a. For uncovered interest parity to hold, investors must expect that the rate of changein the spot exchange-rate value of the yen equals the interest rate differential, which is zero. Investors must expect that the future spot value is the same as the currentspot value, $0.01/yen.b. If investors expect that the exchange rate will be $0.0095/yen, then they expect theyen to depreciate from its initial spot value during the next 90 days. Given the other rates, investors tend to shift their investments toward dollar-denominatedinvestments. The extra supply of yen (and demand for dollars) in the spot exchange market results in a decrease in the current spot value of the yen (the dollarappreciates). The shift to expecting that the yen will depreciate (the dollarappreciate) sometime during the next 90 days tends to cause the yen to depreciate (the dollar to appreciate) immediately in the current spot market.6. The law of one price will hold better for gold. Gold can be traded easily so that anyprice differences would lead to arbitrage that would tend to push gold prices (stated in a common currency by converting prices using market exchange rates) back close to equality. Big Macs cannot be arbitraged. If price differences exist, there is noarbitrage pressure, so the price differences can persist. The prices of Big Macs(stated in a common currency) vary widely around the world.8. According to PPP, the exchange rate value of the DM (relative to the dollar) has risensince the early 1970s because Germany has experienced less inflation than has the United States—the product price level has risen less in Germany since the early1970s than it has risen in the United States. According to the monetary approach,the German price level has not risen as much because the German money supplyhas increased less than the money supply has increased in the United States, relative to the growth rates of real domestic production in the two countries. The Britishpound is the opposite case—more inflation in Britain than in the United States, and higher money growth in Britain.10. a. Because the growth rate of the domestic money supply (M s) is two percentagepoints higher than it was previously, the monetary approach indicates that theexchange rate value (e) of the foreign currency will be higher than it otherwisewould be—that is, the exchange rate value of the country's currency will be lower.Specifically, the foreign currency will appreciate by two percentage points more per year, or depreciate by two percentage points less. That is, the domestic currency will depreciate by two percentage points more per year, or appreciate by twopercentage points less.b. The faster growth of the country's money supply eventually leads to a faster rate ofinflation of the domestic price level (P). Specifically, the inflation rate will be twopercentage points higher than it otherwise would be. According to relative PPP, afaster rate of increase in the domestic price level (P) leads to a higher rate ofappreciation of the foreign currency.12. a. For the United States in 1975, 20,000 = k⋅100⋅800, or k = 0.25.For Pugelovia in 1975, 10,000 = k⋅100⋅200, or k = 0.5.b. For the United States, the quantity theory of money with a constant k meansthat the quantity equation with k = 0.25 should hold in 2002: 65,000 =0.25⋅260⋅1,000. It does. Because the quantity equation holds for both years with thesame k, the change in the price level from 1975 to 2002 is consistent with thequantity theory of money with a constant k. Similarly, for Pugelovia, the quantityequation with k = 0.5 should hold for 2002, and it does (58,500 = 0.5⋅390⋅300).14.a. The tightening typically leads to an immediate increase in the country's interestrates. In addition, the tightening probably also results in investors' expecting that the exchange-rate value of the country's currency is likely to be higher in the future. The higher expected exchange-rate value for the currency is based on the expectation that the country's price level will be lower in the future, and PPP indicates that thecurrency will then be stronger. For both of these reasons, international investors will shift toward investing in this country's bonds. The increase in demand for thecountry's currency in the spot exchange market causes the current exchange-ratevalue of the currency to increase. The currency may appreciate a lot because thecurrent exchange rate must "overshoot" its expected future spot value. Uncovered interest parity is reestablished with a higher interest rate and a subsequent expected depreciation of the currency.b. If everything else is rather steady, the exchange rate (the domestic currency priceof foreign currency) is likely to decrease quickly by a large amount. After this jump, the exchange rate may then increase gradually toward its long-run value—the value consistent with PPP in the long run.Chapter 62. We often use the term pegged exchange rate to refer to a fixed exchange rate,because fixed rates generally are not fixed forever. An adjustable peg is an exchange rate policy in which the "fixed" exchange rate value of a currency can be changedfrom time to time, but usually it is changed rather seldom (for instance, not morethan once every several years). A crawling peg is an exchange rate policy in whichthe "fixed" exchange rate value of a currency is changed often (for instance, weekly or monthly), sometimes according to indicators such as the difference in inflationrates.4. Disagree. If a country is expected to impose exchange controls, which usually makeit more difficult to move funds out of the country in the future, investors are likely to try to shift funds out of the country now before the controls are imposed. Theincrease in supply of domestic currency into the foreign exchange market (orincrease in demand for foreign currency) puts downward pressure on the exchange rate value of the country's currency—the currency tends to depreciate.6. a. The market is attempting to depreciate the pnut (appreciate the dollar) toward avalue of 3.5 pnuts per dollar, which is outside of the top of the allowable band (3.06 pnuts per dollar). In order to defend the pegged exchange rate, the Pugelovianmonetary authorities could use official intervention to buy pnuts (in exchange fordollars). Buying pnuts prevents the pnut’s value from declining (selling dollarsprevents the dollar’s value from rising). The intervention satisfies the excess private demand for dollars at the current pegged exchange rate.b. In order to defend the pegged exchange rate, the Pugelovian government couldimpose exchange controls in which some private individuals who want to sell pnuts and buy dollars are told that they cannot legally do this (or cannot do this without government permission, and not all requests are approved by the government). By artificially restricting the supply of pnuts (and the demand for dollars), thePugelovian government can force the remaining private supply and demand to"clear" within the allowable band. The exchange controls attempt to stifle the excess private demand for dollars at the current pegged exchange rate.c. In order to defend the pegged exchange rate, the Pugelovian government couldincrease domestic interest rates (perhaps by a lot). The higher domestic interestrates shift the incentives for international capital flows toward investments inPugelovian bonds. The increased flow of international financial capital into Pugelovia increases the demand for pnuts on the foreign exchange market. (Also, thedecreased flow of international financial capital out of Pugelovia reduces the supply of pnuts on the foreign exchange market.) By increasing the demand for pnuts (and decreasing the supply), the Pugelovian government can induce the private market to clear within the allowable band. The increased domestic interest rates attempt toshift the private supply and demand curves so that there is no excess privatedemand for dollars at the current pegged exchange rate value.8. a. The gold standard was a fixed rate system. The government of each countryparticipating in the system agreed to buy or sell gold in exchange for its owncurrency at a fixed price of gold (in terms of its own currency). Because eachcurrency was fixed to gold, the exchange rates between currencies also tended to be fixed, because individuals could arbitrage between gold and currencies if thecurrency exchange rates deviated from those implied by the fixed gold prices.b. Britain was central to the system, because the British economy was the leader inindustrialization and world trade, and because Britain was considered financiallysecure and prudent. Britain was able and willing to run payments deficits thatpermitted many other countries to run payments surpluses. The other countriesused their surpluses to build up their holdings of gold reserves (and of international reserves in the form of sterling-denominated assets). These other countries weresatisfied with the rate of growth of their holdings of liquid reserve assets, and most countries were able to avoid the crisis of running low on international reserves.c. During the height of the gold standard, from about 1870 to 1914, the economicshocks to the system were mild. A major shock—World War I—caused manycountries to suspend the gold standard.d. Speculation was generally stabilizing, both for the exchange rates between thecurrencies of countries that were adhering to the gold standard, and for theexchange rates of countries that temporarily allowed their currencies to float.10. a. The Bretton Woods system was an adjustable pegged exchange rate system.Countries committed to set and defend fixed exchange rates, financing temporarypayments imbalances out of their official reserve holdings. If a "fundamentaldisequilibrium" in a country's international payments developed, the country could change the value of its fixed exchange rate to a new value.b. The United States was central to the system. As the Bretton Woods system evolved,it became essentially a gold-exchange standard. The monetary authorities of other countries committed to peg the exchange rate values of their currencies to the U.S.dollar. The U.S. monetary authority committed to buy and sell gold in exchange for dollars with other countries' monetary authorities at a fixed dollar price of gold.c. To a large extent speculation was stabilizing, both for the fixed rates followed bymost countries, and for the exchange rate value of the Canadian dollar, whichfloated during 1950-62. However, the pegged exchange rate values of currenciessometimes did come under speculative pressure. International investors andspeculators sometimes believed that they had a one-way speculative bet againstcurrencies that were considered to be "in trouble.” If the country did manage todefend the pegged exchange rate value of its currency, the investors betting against the currency would lose little. They stood to gain a lot of profit if the currency wasdevalued. Furthermore, the large speculative flows against the currency requiredlarge interventions to defend the currency's pegged value, so that the government was more likely to run so low on official reserves that it was forced to devalue.12. a. The dollar bloc and the euro bloc. A number of countries peg their currencies to theU.S. dollar. A number of European countries use the euro, and, in addition, a number of other countries peg their currencies to the euro.b. The other major currencies that float independently include (as of the beginning of2002) the Japanese yen, the British pound, the Canadian dollar, and the Swiss franc.c. The exchange rates between the U.S. dollar and the other major currencies havebeen floating since the early 1970s. The movements in these rates exhibit trends in the long run—over the entire period since the early 1970s. The rates also showsubstantial variability or volatility in the short and medium runs—periods of less than one year to periods of several years. The long run trends appear to be reasonablyconsistent with the economic fundamentals emphasized by purchasing powerparity—differences in national inflation rates. The variability or volatility in the short or medium run is controversial. It may simply represent rational responses to thecontinuing flow of economic and political news that has implications for exchange rate values. The effects on rates can be large and rapid, because overshootingoccurs as rates respond to important news. However, some part of the largevolatility may also reflect speculative bandwagons that lead to bubbles thatsubsequently burst.Chapter 72. Disagree. In a sense a national government cannot go bankrupt, because it can printits own currency. But a national government can refuse to honor its obligations,even if it might be able to pay. If the benefit from not paying exceeds the cost of not paying, the government may rationally refuse to pay. And, a national governmentcan run short of foreign currency to pay obligations denominated in foreigncurrency, because it cannot print foreign money.4. The debt crisis in 1982 was precipitated by (a) increased cost of servicing debt,because of a rise in interest rates in the United States and other developed countries as tighter monetary policies were used to fight inflation, (b) decreased exportearnings in the debtor countries, because of decreased demand and lowercommodity prices as the tighter monetary policies resulted in a world recession, and(c) an investor shift to curtailing new lending and trying to get old loans repaidquickly, once it became clear that (a) and (b) would lead to some defaults.6. With free international lending Japan lends 1,800 (= 6,000 - 4,200) to America, at。

金融市场与金融机构基础(第3章)英文版答案

ANSWERS TO QUESTIONS FOR CHAPTER 3(Questions are in bold print followed by answers.)1. Explain the ways in which a depository institution can accommodate withdrawal and loan demand.A depository institution can accommodate loan and withdrawal demands first by having sufficient cash on hand. In addition it can attract more deposits, borrow from the Fed or other banks, and liquidate some of its other assets.2. Why do you think a debt instrument whose interest rate is changed periodically based on some market interest rate would be more suitable for a depository institution than a long-term debt instrument with a fixed interest rate?This question refers to asset-liability management by a depository institution. An adjustable rate can eliminate or minimize the mismatch of maturity risk. As interest rates rise, the institution would have to pay more for deposits, but would also receive higher payments from its loan.3. What is meant by:a.individual bankingb.institutional bankingc.global bankinga.Individual banking is retail or consumer banking. Such a bank emphasizes individualdeposits, consumer loans and personal financial trust services.b.An institutional bank caters more to commercial, industrial and government customers. Itissues deposits to them and tries to meet their loan needs.c. A global bank encompasses many financial services for both domestic and foreign customers.It is much involved in foreign exchange trading as well as the financial of international trade and investment.4.a.What is the Basel Committee for Bank Supervision?b.What do the two frameworks, Basel I and Basel II, published by the BaselCommittee for Bank Supervision, address regarding banking?a.It is the organization that plays the primary role in establishing risk and managementguidelines for banks throughout the world.b.The frameworks set forth minimum capital requirements and standards.5. Explain each of the following:a.reserve ratiob.required reservesa.The reserve ratio is the percentage of deposits a bank must keep in a non-interest-bearingaccount at the Fed.b.Required reserves are the actual dollar amounts based on a given reserve ratio.6. Explain each of the following types of deposit accounts:a.demand depositb.certificate of depositc.money market demand accounta.Demand deposits (checking accounts) do not pay interest and can be withdrawn at any time(upon demand).b.Certificates of Deposit (CDs) are time deposits which pay a fixed or variable rate of interestover a specified term to maturity. They cannot be withdrawn prior to maturity without a substantial penalty. negotiable CDs (large business deposits) can be traded so that the original owner still obtains liquidity when needed.c.Money Market Demand Accounts (MMDAs) are basically demand or checking accounts thatpay interest. Minimum amounts must be maintained in these accounts so that at least a 7-day interest can be paid. Since many persons find it not possible to maintain this minimum (usually around $2500) there are still plenty of takers for the non-interest-bearing demand deposits.7. How did the Glass-Steagall Act impact the operations of a bank?The Glass-Steagall Act prohibited banks from carrying out certain activities in the securities markets, which are principal investment banking activities. It also prohibited banks from engaging in insurance activities.28. The following is the book value of the assets of a bank:Asset Book Value (in millions)U.S. Treasury securities $ 50Municipal general obligationbonds50Residential mortgages 400Commercial loans 200Total book value $700a.Calculate the credit risk-weighted assets using the following information:Asset Risk WeightU.S. Treasury securities 0%Municipal general obligationbonds20Residential mortgages 50Commercial loans 100b.What is the minimum core capital requirement?c.What is the minimum total capital requirement?a.The risk weighted assets would be $410b.The minimum core capital is $28 million (.04X700) i.e., 4% of book value.c.Minimum total capital (core plus supplementary capital) is 32.8 million, .08X410, which is8% of the risk-weighted assets.9. In later chapters, we will discuss a measure called duration. Duration is a measure of the sensitivity of an asset or a liability to a change in interest rates. Why would bank management want to know the duration of its assets and liabilities?a.Duration is a measure of the approximate change in the value of an asset for a 1% change ininterest rates.b.If an asset has a duration of 5, then the portfolio’s value will change by approximately 5% ifinterest rate changes by 100 basis points.3-310.a.Explain how bank regulators have incorporated interest risk into capitalrequirements.b.Explain how S&L regulators have incorporated interest rate risk into capitalrequirements.a.The FDIC Improvement Act of 1991, required regulators of DI to incorporate interest raterisk into capital requirements. It is based on measuring interest rate sensitivity of the assets and liabilities of the bank.b.The OST adopted a regulation that incorporates interest rate risk for S&L. It specifies that ifthrift has greater interest rate risk exposure, there would be a deduction of its risk-based capital. The risk is specified as a decline in net profit value as a result of 2% change in market interest rate.11. When the manager of a bank’s portfolio of securities considers alternative investments, she is also concerned about the risk weight assigned to the security. Why?The Basel guidelines give weight to the credit risk of various instruments. These weights are 0%, 20%, 50% and 100%. The book value of the asset is multiplied by the credit risk weights to determine the amount of core and supplementary capital that the bank will need to support that asset.12. You and a friend are discussing the savings and loan crisis. She states that “the whole mess started in the early 1980s.When short-term rates skyrocketed, S&Ls got killed—their spread income went from positive to negative. They were borrowing short and lending long.”a.What does she mean by “borrowing short and lending long”?b.Are higher or lower interest rates beneficial to an institution that borrows shortand lends long?a.In this context, borrowing short and lending long refers to the balance sheet structure ofS&Ls. Their sources of funds (liabilities) are short-term (mainly deposits) and their uses (assets) are long-term in nature (e.g. residential mortgages).b.Since long-term rates tend to be higher than short-term ones, stable interest rates would bethe best situation. However, rising interest rates would increase the cost of funds for S&Ls without fully compensating higher returns on assets. Hence a decline in interest rate spread or margin. Thus lower rates, having an opposite effect, would be more beneficial.13. Consider this headline from the New York Times of March 26, 1933: “Bankers will fight Deposit Guarantees.” In this article, it is stated that bankers argue that deposit guarantees will encourage bad banking. Explain why.The barrier imposed by Glass-Steagall act was finally destroyed by the Gramm-Leach Bliley Act of 1999. This act modified parts of the BHC Act so as to permit affiliations between banks and insurance underwriters. It created a new financial holding company, which is authorized to4engage in underwriting and selling securities. The act preserved the right of state to regulate insurance activities, but prohibits state actions that have would adversely affected bank-affiliated firms from selling insurance on an equal basis with other insurance agents.14. How did the Gramm-Leach-Bliley Act of 1999 expand the activities permitted by banks?a.Deposit insurance provides a safety net and can thus make depositors indifferent to thesoundness of the depository recipients of their funds. With depositors exercising little discipline through the cost of deposits, the incentive of some banks owners to control risk-taking accrue to the owners. It becomes a “heads I win, tails you lose” situation.b.One the positive side, deposit insurance provides a comfort to depositors and thus attractsdepositors to financial institutions. But such insurance carries a moral hazard, it can be costly and, unless premiums are risk-based, it forces the very sound banks to subsidize the very risky ones.15. The following quotation is from the October 29, 1990 issue of Corporate Financing Week:Chase Manhattan Bank is preparing its first asset-backed debt issue, becomingthe last major consumer bank to plan to access the growing market, Street asset-backed officialsSaid…Asset-backed offerings enable banks to remove credit card or other loanreceivables from their balance sheets, which helps them comply with capitalrequirements.a.What capital requirements is this article referring to?b.Explain why asset securitization reduces capital requirements.a.The capital requirements mentioned are risk based capital as specified under the BaselAgreement, which forces banks to hold minimum amounts of equity against risk-based assets.b.Securitization effectively eliminates high risk based loans from the balance sheet. The capitalrequirements in the case of asset securitization are lower than for a straight loan.16. Comment on this statement: The risk-based guidelines for commercial banks attempt to gauge the interest rate risk associated with a bank’s balance sheet.This statement is incorrect. The risk-based capital guidelines deal with credit risk, not interest-rate risk, which is the risk of adverse changes of interest rates on the portfolio position.17.a.What is the primary asset in which savings and loan associations invest?b.Why were banks in a better position than savings and loan associations toweather rising interest rates?a.Savings and Loans invest primarily in residential mortgages.b.During 1980's, although banks also suffered from the effects of deregulation and rising3-5interest rates, relatively they were in a better position than S&L association because of their superior asset-liability management.618. What federal agency regulates the activities of credit unions?The principal federal regulatory agency is the National Credit Union Administration.3-7。

陈雨露国际金融第三章课后答案

5、假定芝加哥IMM交易的3月到期的英镑期货价格为$1.5020￡,某银行报同一交割日期的英镑远期合约价格为$1.5000￡。

（1）如果不考虑交易成本，是否存在无风险套利机会？
存在
（2）应当如何操作才能去谋取收益？使计算最大可能收益。

买入远期合约，卖出期货合约。

最大可能收益为1.3%
（3）套利活动对两个尺长的英镑价格将产生怎样影响？
远期市场英镑价格上升，期货市场英镑价格下降。

（4）结合以上分析，试论证外汇期货市场与外汇远期市场之间存在联动性。

期货市场与远期市场上的价格应该趋于一致，苟泽存在套利机会，套利行为会使得价格差异消失，比如远期市场的外汇价格低于期货市场的外汇价格，则可以在远期市场买入外汇，同时在期货市场卖出外汇，这样既可以获得无缝小收益。

但如果考虑到远期市场的流动性相对较差，远期市场的外汇价格可能相对略低，而期货市场的流动性较好，外汇价格可以略高。

6、家丁一美国企业的德国分公司将在9月份收到125万欧元的货款。

为规避欧元贬值风险，购买了20张执行汇率为$0.900/€的欧式看跌期权，期权费为每欧元0.0216美元。

（
（2）若合约到期日的现汇汇率为$0.850/€，计算该公司的损益结果。

公司在期权市场盈利$35500。

国际金融中英文版答案）

国际金融中英文版答案）国际金融中英文版Chapter 2:Payments among NationsSingle-Choice Questions1.A country?s balance of payments records:一个国家的国际收支平衡记录了 Ba.The value of all exports of goods and services from that countryfor a period of time.b.All flows of value between that c ountry?s residents andresidents of the rest of the world during a period of time.在一定时间段里,一个国家居民的资产和其它世界居民资产的流动c.All flows of financial assets that cross that country?s bordersduring a period of time.d.All flows of goods into that country during a period of time.2.A credit item in the balance of payments is: 在国际收支平衡里的贷项是 Aa.An item for which the country must be paid.一个国家必须收取的条款b.An item for which the country must pay.c.Any imported item.d.An item that creates a monetary claim owed to a foreigner.3.Every international exchange of value is entered into thebalance-of-payments accounts __________ time(s). 每一次国际等价交换都记进国际收支帐户２次 Ba.1b.2c.3d.44.A debit item in the balance of payments is: 在国际收支平衡中的借项是 Ba.An item for which the country must be paid.b.An item for which the country must pay.一个国家必须支付的条款c.Any exported item.d.An item that creates a monetary claim on a foreigner.5.In a nation's balance of payments, which one of the following items isalways recorded as a positive entry? D在国际收支中,下列哪个项目总被视为有利条项a.Changes in foreign currency reserves.b.Imports of goods and services./doc/864363004.html,itary foreign aid supplied to allied nations.d.Purchases by foreign travelers visiting the country.国外游客在本国发生的购买6.The sum of all of the debit items in the balance of payments: 在收支平衡中,所有贷项的总和 Ba.Equals the overall balance.b.Equals the sum of all credit items.等于所有借项的总和c.Equals …compensating? transactions.d.Equals the sum of credit items minus errors and omissions.7.Which of the following capital transactions are entered as debits inthe U.S. balance of payments? 下列哪个资本交易在美国的收支平衡中当作借项？Ba.A U.S. resident transfers $100 from his account at Credit Suissein Basel (Switzerland) to his account at a San Francisco branchof Wells Fargo Bank.b.A French resident transfers $100 from his account at WellsFargo Bank in San Francisco to his Credit Suisse account in Basel.一个法国居民在旧金山的Fargo Bank用其帐户转帐１００美金到位于巴塞尔的瑞士信贷户口c.A U.S. resident sells his IBM stock to a French resident.d.A U.S. resident sells his Credit Suisse stock to a Frenchresident.8.An increase in a nation's financial liabilities to foreign residents is a:一个国家对另一个国家金融负债的增加是一种Ca.Reserve inflow.b.Reserve outflow.c.Capital inflow.资本流入d.Capital outflow.9.___A_______ are money-like assets that are held by governmentsand that are recognized by governments as fully acceptable forpayments between them. 官方国际储备资产是一种类似于钱的资产，这种资产由政府掌握并作为政府间的一种支付手段得到充分认可.a.Official international reserve assets 官方国际储备资产b.Unofficial international reserve assetsc.Official domestic reserve assetsd.Unofficial domestic reserve assets10.W hich of the following is considered a capital inflow? 下列哪项被视为资本流入 Aa.A sale of U.S. financial assets to a foreign buyer.美国一金融资产卖给一外国买家b.A loan from a U.S. bank to a foreign borrower.c.A purchase of foreign financial assets by a U.S. buyer.d.A U.S. citizen?s repayment of a loan from a foreign bank.11.I n a country?s balance of payments, which of the followingtransactions are debits?一个国家的收支平衡表中,哪个交易属于借项？ Aa.Domestic bank balances owned by foreigners are decreased.外国人拥有的国内银行资产的下降b.Foreign bank balances owned by domestic residents aredecreased.c.Assets owned by domestic residents are sold to nonresidents.d.Securities are sold by domestic residents to nonresidents.12.T he role of ___D_______ is to direct one nation?s savings intoanother nation?s investments: 资金流的作用是指导一个国家的储蓄进入到另一个国家的投资a.Merchandise trade flowsb.Services flowsc.Current account flowsd.Capital flows资金流13.T he net value of flows of goods, services, income, and unilateraltransfers is called the: 商品,服务,收入和单方面转让等现金流的净收益叫经常账目（户）Ba.Capital account.b.Current account.经常账目（户）c.Trade balance.d.Official reserve balance.14.T he net value of flows of financial assets and similar claims(excluding official international reserve asset flows) is called the: 金融资产和类似的资产（官方国际储备资产流除外）的净值流叫Aa.Financial account.金融帐b.Current account.c.Trade balance.d.Official reserve balance.15.T he financial account in the U.S. balance of payments includes:美国国家收支表中的金融帐包括：Ba.Everything in the current account.b.U.S. government payments to other countries for the use ofmilitary bases.美政府采用其它国家军事基地所需支付款项c.Profits that Nissan of America sends back to Japan.d.New U.S. investments in foreign countries.16.ＡU.S. resident increasing her holdings of a foreign financial assetcauses a: 一个美国居民增持一外国金融资产会引起Da.Credit in the U.S. current account.b.Debit in the U.S. current account.c.Credit in the U.S. capital account.d.Debit in the U.S. capital account.美国资本帐的借帐17.A foreign resident increasing her holdings of a U.S. financial assetcauses a: 一个美国居民增持本国一金融资产会引起 Ca.Credit in the U.S. current account.b.Debit in the U.S. current account.c.Credit in the U.S. capital account.美国资本帐的贷帐d.Debit in the U.S. capital account.18.A deficit in the current account: 经常帐户中的赤字Aa.Tends to cause a surplus in the financial account.会导致金融帐中的盈余b.Tends to cause a deficit in the financial account.c.Has no relationship to the financial account.d.Is the result of increasing exports and decreasing imports.19.I n September, 2005, exports of goods from the U.S. decreased $3.3billion to $73.4 billion, and imports of goods increased $3.8 billion to $144.5 billion. This increased the deficit in:2005年8月,美国商品出口降低了33亿美元,共734亿美元；商品进口上升到1145亿美元,上长了38亿.这样增加了哪个方面的赤字？Ca.The balance of payments.b.The financial account.c.The current account.经常帐户d.Unilateral transfers.20.W hich of the following would contribute to a U.S. current accountsurplus? 以下哪项有助于美国现金帐的盈余？ Ba.The United States makes a unilateral tariff reduction onimported goods.b.The United States cuts back on American military personnelstationed in Japan.美国削减在日本的军事人员c.U.S. tourists travel in large numbers to Asia.d.Russian vodka becomes increasingly popular in the UnitedStates.21.W hich of the following transactions is recorded in the financialaccount?以下哪个交易会被当作金融帐Aa.Ford motor company builds a new plant in China 福特摩托公司在中国设立车间b.A Chinese businessman imports Ford automobiles from theUnited States.c.A U.S. tourist spends money on a trip to China.d.The New York Yankees are paid $10 million by the Chinese toplay an exhibition game in Beijing, China.22.I f a British business buys U.S. government securities, how will thisbe entered in the balance of payments? 如果一英国商人购买了美国政府的债券,那么这个交易在收支平衡表中会被当作是？Ca.It will appear in the trade account as an import.b.It will appear in the trade account as an export.c.It will appear in the financial account as an increase in U.S.assets held by foreigners.会被当作是外国人所有的美国资产增长d.It will appear in the financial account as a decrease in U.S.assets held by foreigners.23.I n the balance of payments, the statistical discrepancy or error term isused to: 在收支平衡表中, 统计差异与错误项目会用来确保借帐总和跟贷帐总和一致 Aa.Ensure that the sum of all debits matches the sum of all credits.b.Ensure that imports equal the value of exports.c.Obtain an accurate account of a balance-of-payments deficit.d.Obtain an accurate account of a balance-of-payments surplus.24.O fficial reserve assets are: 官方储备资产是 Ba.The gold holdings in the nation?s central bank.b.Money like assets that are held by governments and that arerecognized by governments as fully acceptable for payments between them. 官方国际储备资产是一种类似于钱的资产，这种资产由政府掌握并作为政府间的一种支付手段得到充分认可/doc/864363004.html,ernment T-bills and T-bonds./doc/864363004.html,ernment holdings of SDR?s25.W hich of the following constitutes the largest component of theworld?s international reserve assets?下列哪项构成了世界国际储备资产的大部份？ Da.Gold.b.Special Drawing Rights.c.IMF Reserve Positions.d.Foreign Currencies.外汇（币）26.T he net accumulation of foreign assets minus foreign liabilities is:海外净资产的积累减去外债等于C/doc/864363004.html, official reserves./doc/864363004.html, domestic investment./doc/864363004.html, foreign investment.国外投资净值/doc/864363004.html, foreign deficit.27.A country experiencing a current account surplus: 一个国家经历经常帐户的盈余 Ba.Needs to borrow internationally.b.Is able to lend internationally.就有能力向外放贷c.Must also have had a surplus in its "overall" balance.d.Spent more than it earned on its merchandise and service trade,international income payments and receipts and internationaltransfers.28.T he ___C_______ measures the sum of the current accountbalanceplus the private capital account balance.官方结算差额是指经常帐户余额的总和加上私人资本帐（B=CA+FA,FA:为非官方投资和储备）a.Official capital balanceb.Unofficial capital balancec.Official settlements balance官方结算差额d.Unofficial settlements balance29.I f the overall balance is in __A________, there is an accumulation ofofficial reserve assets by the country or a decrease in foreign official reserve holdings of the country's assets. 如果综合差额处于盈余，那么会出现本国官方储备资产的积累或者国外官方储备的减少（B=CA+FA,B+OR=0，OR:官方储备金额）a.Surplus盈余b.Deficitc.Balanced.Foreign hands30.W hich of the following is the current account balance NOT equal to?以下哪项不等同于现金帐 Da.The difference between domestic product and domesticexpenditure.b.The difference between national saving and domesticinvestment./doc/864363004.html, foreign investment.d.The difference between government saving and governmentinvestment. 政府储蓄与政府投资的差值True/False Questions31.C apital inflows are debits and capital outflows are credits. 资金流入是借项，资金外流是贷项32.T he net value of the flow of goods, services, income, and gifts is thecurrent account balance. (T) 商品,服务,收入和单方面转让等现金流的净收益叫经常账目余额33.T he net flow of financial assets and similar claims is the privatecurrent account balance. 金融资产和类似的资产的净值叫经常帐目余额34.T he majority of countries' official reserves assets are now foreignexchange assets, financial assets denominated in a foreign currencythat is readily acceptable in international transactions. (T)大部份官方储备资产作为以外汇资产和金融资产为命名的外币在世界上交易与流通.35.A country's financial account balance equals the country's net foreigninvestment.一个国家的金融帐差额相当于一个国家的净国外投资36.A country has a current account deficit if it is saving more than it isinvesting domestically.一个国家如果在国内的储蓄比投资要大,那么会出现经常账目赤字37.T he official settlements balance measures the sum of the capitalaccount balance plus the public current account balance. 官方结算差额是资金帐户余额的总额加上公共经常帐户余额38.A nation's international investment position shows itsstock ofinternational assets and liabilities at a moment in time. (T)一个国家的国际投资状况反映出它在特定时间里的国际资产股份以及债务情况.39.A nation is a borrower if its current account is in deficit during a timeperiod. (T)在一段时间内,如果一个国家的经常帐出现赤字,那么它就是借方.40.A nation is a debtor if its net stock of foreign assets is positive. 如果一个国家的国外资产净储备是正数,那么它是借方（债务方）41.A transaction leading to a foreign resident increasing her holdings ofa U.S. financial asset will be recorded as a debit on the U.S. financialaccount.如果一项交易引起一外国居民增持美国金融资产的股份,那么这项交易在美国金融帐中会被当作借项42.A credit item is an item for which a country must pay. 贷项是指一个国家必须还款的条项43.G old is a major reserve asset that is currently often used in officialreserve transactions. 黄金作为主要的储备资产,常被用在官方储备交易当中.44.T he current account balance is equal to the difference betweendomestic product and national expenditure.(T)经常项目余额等于国民生产与国民支出的差额45.I n 2007 U.S. households, businesses and government were buyingmore goods and services than they were producing.(T)２００７年,美国家庭,商业,政府购买的商品和服务比他们生产（商品和服务）的要多.46。

实用国际金融英语参考答案

《实用国际金融英语》参考答案Chapter 1Lead-in Activities1. Balance of payment data serve as record of the flows of goods, services and finance between an economy and the rest of the world. As one of the primary functions of the IMF is to prevent financial crises and assist countries in balance of payment difficulties, the collection of standardized, comparable balance of payment data is seen as a core task.BOP is a statistical statement that summarizes, for a specific period (typically a year or quarter), the economic transactions of an economy with the rest of the world. It covers:·All the goods, services, factor income and current transfers an economy receives from or provides to the rest of the world;·Capital transfers and changes in an economy’s external financial claims and liabilities.2. When a country has a surplus in its current account, i.e. when its exports exceed its imports, there will probably be a surplus in the balance of payment because the current account forms a very large proportion in the balance of payment. The surplus means the supply of foreign exchange exceeds demand. The monetary authority has to increase the purchase of the foreign currency and the stock of its international reserve. Meanwhile, the supply of domestic currency adds at an accelerated speed, which may lead to further issue of the local currency and cause inflation.3. When there is a long-lasting surplus in the balance of payment, particularly in the current account, there will also be excessive demand for its currency. The country’s exchange rate will rise, unless the central bank is willing to provide its currency to the market in exchange for foreign currencies. For example, when the export of the United States exceeds much more than import, a large quantity of US dollars are wanted by those importers to pay for the US goods. Thus, the exchange rate of US dollars rises.When the balance of payment has a long-lasting deficit, the payable debts denominated in foreign currencies are more than receivable claims; there will be a considerable demand for foreign currencies over the supply. As a result, the foreign currencies wanted appreciate, and the domestic one devalues.4.Temporary drop of surplus or moderate short-term deficit does not seriously affect a country’s economy or foreign trade. On one hand, deficit means larger amount of import than export in current account; on the other hand, it more likely shows an increasing demand of foreign currencies to pay for the imported goods. In other words, deficit may cause the raise of exchange rate of foreign hard currencies, which is conducive to the investors from the issuing countries of these appreciating currencies. This is surely good news to those that are in need of foreign investment. Temporary drop of surplus helps cool off the national economy and serves as a brake stopping ongoing inflation.5.The stock of international reserve should be neither more or less than necessary. The International Exchange Reserves are kept in the debit entry in BOP statements in that the monetary authority has to pay in exchange for the foreign hard currencies. Therefore, the amount and composition of exchange reserves are to be decided by taking the following factors into consideration.(1) The duration of the government’s external debt should be related to the duration of thereserves, with emphasis on the interest rate exposure risk.(2) High-risk-return assets should be limited within a safe range.(3) One of the most important issues raised in the context of investing the reserves of a centralbank is the choice of a reference basket.It is well recognized that the lowest level of the stock of international reserve should be no less than the amount payable for a 3-month import. And, the stronger an economy is, the less international reserve is to be kept.6. C7. CExercisesI. True or False1. F2. F3. F4. F5. F6. F7. F8. F9. F 10. F11. F 12. T 13. F 14. F 15. TII．Translation Task1.在与国际货币基金组织的技术援助使团于2000年上半年进行了磋商之后，国家外汇管理局吸取了国际通行的经验，以提高其国际收支报告的及时性。

国际金融英文版习题Chapter-3(1)

INTERNATIONAL FINANCEAssignment Problems (3) Name: Student#: I. Choose the correct answer for the following questions (only ONE correct answer) (2 credits for each question, total credits 2 x 25 = 50)1. Interbank quotations that include the United States dollars are conventionally given in __________, which state the foreign currency price of one U.S. dollar, such as a bid price of SFr 0.85/$.A. indirect quoteB. direct quoteC. American quoteD. European quote2. The spot exchange rate published in financial newspapers is usually the __________.A. nominal exchange rateB. real exchange rateC. effective exchange rateD. equilibrium exchange rate3. The foreign exchange refers to the __________.A. foreign bank notes and coinsB. demand deposits in foreign banksC. foreign securities that can be easily cashedD. all of the above4. The functions of the foreign exchange market come down to __________.A. converting the currency of one country into the currency of anotherB. providing some insurance against the foreign exchange riskC. making the foreign exchange speculation easyD. Only A and B are true.5. Which of the following is NOT true regarding the foreign exchange market?A. It is the place through which people exchange one currency for another.B. The exchange rate nowadays is mainly determined by the market forces.C. Most foreign exchange transactions are physically completed in this market.D. All of the above are true.6. The world largest foreign exchange markets are __________ respectively.A. London, New York and TokyoB. London, Paris and FrankfurtC. London, Hong Kong and SingaporeD. London, Zurich and Bahrain7. The foreign exchange market is NOT efficient because __________.A. monetary authorities dominate the foreign exchange market and everybody knows that by definition, central banks are inefficientB. commercial banks and other participants of the market do not compete with one another due to the fact that transaction takes place around the world and not in a single centralized locationC. foreign exchange dealers have different prices such as bid and ask pricesD. None of the reasons listed are correct because the foreign exchange market is an efficient market8. __________ earn a profit by a bid-ask spread on currencies they buy and sell. __________ on the other hand, earn a profit by bringing together buyers and sellers of foreign exchanges and earning a commission on each sale and purchase.A. Foreign exchange brokers; foreign exchange dealersB. Foreign exchange dealers; foreign exchange brokersC. arbitragers; speculatorsD. commercial banks; central banks9. Most foreign exchange transactions are through the U.S. dollars. If the transaction is expressed as the currencies per dollar, this is known as __________ whereas __________ are expressed as dollars per currency.A. direct quote; indirect quoteB. indirect quote; direct quoteC. European quote; American quoteD. American quote, European quote10. From the viewpoint of a Japanese investor, which of the following would be a direct quote?A. SFr 1.25/€B. $1.55/₤C. ¥ 110/€D. €0.0091/ ¥11. Which of the following is true about the foreign exchange market?A. It is a global network of banks, brokers, and foreign exchange dealers connected by electronic communications system.B. The foreign exchange market is usually located in a particular place.C. The foreign exchange rates are usually determined by the related monetary authorities.D. The main participants in this market are currency speculators from different countries.12. The extent to which the income from individual transactions is affected by fluctuations in foreign exchange values is considered to be _________.A. Translation exposureB. economic exposureC. transaction exposureD. accounting exposure13. Which of the following exchange rates is adjusted for price changes?A. nominal exchange rateB. real exchange rateC. effective exchange rateD. equilibrium exchange rate14. Suppose the exchange rate of the RMB versus U.S. dollar is ¥6.8523/$ now. If the RMB were to undergo a 10% depreciation, the new exchange rate in terms of ¥/$ would be:A. 6.1671B. 7.5375C. 6.9238D. 7.613515. At least in a U.S. MNC’s financial accounting statement, if the value of the euro depreciates rapidly against that of the dollar over a year, this would reduce the dollar value of the euro profit made by the European subsidiary. This is a typical __________.A. transaction exposureB. translation exposureC. economic exposureD. operating exposure16. A Japanese-based firm expects to receive pound-payment in 6 months. The company has a (an) __________.A. economic exposureB. accounting exposureC. long position in sterlingD. short position in sterling17 The exposure to foreign exchange risk known as Translation Exposure may be defined as __________.A. change in reported owner’s equity in consolidated financial statements caused by a change in exchange ratesB. the impact of settling outstanding obligations entered into before change in exchange rates but to be settled after change in exchange ratesC. the change in expected future cash flows arising from an unexpected change in exchange ratesD. All of the above18 When a firm deals with foreign trade or investment, it usually has foreign exchange risk exposure. So if an American firm expects to receive a dollar-paymentfrom a Chinese company in the next 30 days, the U.S. firm has the possible __________.A. economic exposureB. transaction exposureC. translation exposureD. none of the above19. In order to avoid the possible loss because of the exchange rate fluctuations, a firm that has a __________ position in foreign exchanges can __________ that position in the forward market.A. short; sellB. long; sellC. long; buyD. none of the above20. A forward contract to deliver Japanese yens for Swiss francs could be described either as __________ or __________,A. selling yens forward; buying francs forwardB. buying francs forward; buying yens forwardC. selling yens forward; selling francs forwardD. selling francs forward; buying yens forward21. Dollars are trading at S0SFr/$=SFr0.7465/$ in the spot market. The 90-day forward rate is F1SFr/$=SFr0.7432/$. So the forward __________ on the dollar in basis points is __________:A. discount, 0.0033B. discount, 33C. premium, 0.0033D. premium, 3322. If the spot rate is $1.35/€, 3-month forward rate is $1.36/€, which of the following is NOT true?A. euro is at forward premium by 100 points.B. dollar is at forward discount by 100 points.C. dollar is at forward discount by 55 points.D. euro is at forward premium by 2.96% p.a.23. If the spot C$/$ rate is 1.0305/15, forward dollar is 25/30 premium, the outright forward quote in American term should be __________.A. 1.0330 – 1.0345B. 1.0280 – 1.0285C. 0.9681 – 0.9667D. 0.9728 – 0.972324. If the spot C$/$ rate is 1.0305/15, forward dollar is 25/30 premium, the $/C$ forward quote in terms of points should be __________.A. 30/25B. 25/30C. – (23/28)D. – (28/23)25. The current U.S. dollar exchange rate is ¥85/$. If the 90-day forward dollar rate is ¥90/$, then the yen is selling at a per annum __________ of __________.A. premium; 5.88%B. discount; 5.56%C. premium; 23.52%D. discount; 22.23%II. ProblemsQuestions 1 through 10 are based on the information presented in Table 3.1. (2 credits for each question, total credits 2 x 10 = 20)Table 3.1Country Exchange rate Exchange rate CPI V olume of Volume of (2008) (2009) (2008) exports to U.S imports from U.S. Germany €0.75/$ €0.70/$ 102.5 $200m $350m Mexico Mex$11.8/$ Mex$12.20/$ 110.5 $120m $240mU.S. 105.31. The real exchange rate of the dollar against the euro in 2009 was __________.2. The real exchange rate of the dollar against the peso in 2009 was __________.3. The dollar was __________ against the euro in nominal term by __________.A. appreciated; 6.67%B. depreciated; 6.67%C. appreciated; 7.14%D depreciated; 7.14%4. The Mexican peso was __________ against the dollar in nominal term by __________.A. appreciated; 3.39%B. depreciated; 3.39%C. appreciated; 3.28%D. depreciated; 3.28%5. The volume of the German foreign trade with the U.S. was __________.6. The volume of the Mexican foreign trade with the U.S. was __________.7. Assume the U.S. trades only with the Germany and Mexico. Now if we want to calculate the dollar effective exchange rate in 2009 against a basket of currencies of euro and Mexican peso, the weight assigned to the euro should be __________.8. The weight assigned to the peso should be __________.9. Assume the 2008 is the base year. The dollar effective exchange rate in 2009 was __________.10. Was the dollar generally stronger or weaker in 2009 according to your calculation?11. The following exchange rates are available to you.Fuji Bank ¥80.00/$United Bank of Switzerland SFr0.8900/$Deutsche Bank ¥95.00/SFrAssume you have an initial SFr10 million. Can you make a profit via triangular arbitrage? If so, show steps and calculate the amount of profit in Swiss francs. (8 credits)12. If the dollar appreciates 1000% against the ruble, by what percentage does the ruble depreciate against the dollar? (5 credits)13. As a percentage of an arbitrary starting amount, about how large would transactions costs have to be to make arbitrage between the exchange rates S SFr/$= SFr1.7223/$, S$/￥= $0.009711/¥, and S￥/SFr = ¥61.740/SFr unprofitable? Explain. (7 credits14. You are given the following exchange rates:S￥/A$ = 67.05 – 68.75S￡/A$ = 0.3590 – 0.3670Calculate the bid and ask rate of S￥/￡: (5 credits)15. Suppose the spot quotation on the Swiss franc (CHF) in New York is USD0.9442 –52 and the spot quotation on the Euro (EUR) is USD1.3460 –68. Compute the percentage bid-ask spreads on the CHF/EUR quote. ( 5 credits)Answers to Assignment Problems (3)Part II1. 0.70 x (105.3/102.5) = 0.7 x 1.0273 = 0.71912. 12.2 x (105.3/110.5) = 12.2 x .9529 = 11.62593. B (0.7 /.75) – 1 = -6.67%4. D (1/12.2)/(1/11.8) – 1 = -3.28%5. 5506. 3607. 550/910 = 60.44%8. 360/910 = 39.569. (0.70/0.75)(60.44%) + (12.2/11.8)(39.56%) = .5641 + 0.4090 = .9731 = 97.31%10. weaker, because dollar depreciated by 2.69%.11. Since S￥/$S$/SFr S SFr/￥= 80 x 1/0.8900 x 1/95.00 = 0.946186 < 1, there is an arbitrage opportunity.Steps:①Buy ¥ from Deutsche Bank, SFr10 million x 95.00 = ¥950 million②Buy $from Fuji Bank, $950 m / 80.00 = $11.875 m③Buy SFr from UBS, $11.875 x 0.8900 = SFr10.56875 mProfit (ignoring transaction fees):SFr10.56875 – SFr10 = 0.56875 million = 568,75012. (x – 1) = 1000%; 1/11 – 1 = 90.9%13. S SFr/$ S$/￥S￥/SFr = SFr1.7223/$ x $0.009711/¥ x ¥61.740/SFr = 1.0326If transaction costs exceed $0.0326 (3.26%), the arbitrage is unprofitable.14. Given: S￥/A$ = 67.05 – 68.75S￡/A$ = 0.3590 – 0.3670So, S￥/₤ = 67.05/0.3670 = 182.70 (bid)S￡/₤ = 68.75/0.3590 = 191.50 (ask)15. Given: USD0.9442 – 52/SFrUSD1.3460 – 68/SFrSo, S SRr/€ = 1.3460/0.9452 =1.424 (bid)S SFr/€ = 1.3468/0.9442 = 1.4264 (ask)。

Chapter3InternationalFinancialMarkets练习答案+详解

Chapter 3 Intern atio nal Finan cial Markets1.Assume that a bank's bid rate on Swiss francs is $.45 and its ask rate is $.47.Its bid-ask perce ntage spread is:A)about %.B)about %.C)about %.D)about %.ANSWER: Bbid/ask spread = ask rate ____________ —_bid_rate_SOLUTION: Bid-ask percentage spread = ($.47 - $.45)/$.47 = %2.Assume that a bank's bid rate on Japanese yen is $.0041 and its ask rate is $.0043.Itsbid-ask perce ntage spread is:A)about %.B)about %.C)about %.D)about %.ANSWER: CSOLUTION: Bid-ask percentage spread = ($.0043 - $.0041)/$.0043 = %3.The bid/ask spread for small retail transactions is commonly in the range of ______________________________________ perce nt; the bid/ask spread for wholesale tran sact ions is com mon ly in the range of perce nt.A) 3 to 7; .01 to .03B) 2 to 5; .05 to .10C)10 to 15; .01 to .03D) 1 to 2; .05 to .07ANSWER: A4._________ is not a factor that affects the bid/ask spread.A)Order costsB)Inven tory costsC)VolumeD)All of the above factors affect the bid/ask spread5.The forward rate is the exchange rate used for immediate exchange of currencies.A)true.B)false.ANSWER: B6.The ask quote is the price for which a bank offers to sell a curre ncy.A)true.B)false.ANSWER: A7.According to the text, the forward rate is commonly used for:A)hedgi ng.B)Eurocurre ncy tran sact ions.C)Eurocredit tran sact ions.D)Eurob ond tran sacti ons.ANSWER: A8.If a U.S. firm desires to avoid the risk from exchange rate fluctuations, andit is receivi ng100,000 in 90 days, it could:A)obta in a 90-day forward purchase con tract on euros.B)obta in a 90-day forward sale con tract on euros.C)purchase euros 90 days from now at the spot rate.D)sell euros 90 days from now at the spot rate.ANSWER: B9.If a U.S. firm desires to avoid the risk from exchange rate fluctuations, andit will n eedC$200,000 in 90 days to make payme nt on imports from Can ada, it could:A)obta in a 90-day forward purchase con tract on Can adia n dollars.B)obta in a 90-day forward sale con tract on Can adia n dollars.C)purchase Can adia n dollars 90 days from now at the spot rate.D)sell Can adia n dollars 90 days from now at the spot rate.10.Assume the Canadian dollar is equal to $.88 and the Peruvian Sol is equal to$.35. Thevalue of the Peruvian Sol in Canadian dollars is:A)about .3621 Ca nadian dollars.B)about .3977 Canadian dollars.C)about Can adia n dollars.D)about Can adia n dollars.ANSWER: BSOLUTION: $.35/$.88 = .397711.Which of the follow ing is not true with respect to spot market liquidity? 现货市场流动性A)The more willing buyers and sellers there are, the more liquid a market is.B)The spot markets for heavily traded currencies such as the Japanese yen are veryliquid.C) A currency's liquidity affects the ease with which an MNGcan obtain or sell thatcurre ncy.D)If a curre ncy is illiquid, an MNC is typically able to quickly purchase thatcurre ncy at a reas on able excha nge rate.ANSWER: D12.Forward markets for curre ncies of develop ing coun tries are:A)prohibited.B)less liquid tha n markets for developed coun tries.C)more liquid than markets for developed countries.D)only available for use by gover nment age ncies.发展中国家现货市场流动性较低ANSWER: B13. A forward con tract can be used to lock in the _________________________ of a specified curre ncy for afuture point in time.A)purchase priceB)sale priceD)none of the aboveANSWER: C14.The forward market:A)for euros is very illiquid.B)for Easter n Europea n coun tries is very liquid.C)does not exist for some curre ncies.in n eed of foreig n in need of foreignD) none of the aboveANSWER: C15. _________ is not a bank characteristic important to customersexchange.A) Quote competitive nessB) Speed of executi onC) Forecast ing adviceD) Advice about curre nt market con diti onsE) All of the above are important bank characteristics to customers exchange. ANSWER: E16. The Basel II accord would:A) replace the Basel Accord.B) reduce the amount of capital banks are required to hold.C) require banks to take more risks and to document their risk.D) correct some incon siste ncies that still exist. Operati on risk -1ANSWER: D17. The international money market primarily concentrates on:A) short-term len di ng (one year or less). IMM短期借款B) medium-term lending.C) Ion g-term lending.D) placi ng bonds with in vestors.E) placi ng n ewly issued stock in foreig n markets. ANSWER: A18. The international credit market primarily concentrates on:A) short-term lending (less tha n one year).B) medium-term lending.C) Ion g-term lending. 欧洲信用贷款市场D) provid ing an excha nge of foreig n curre ncies for firms who n eed them.E) placi ng n ewly issued stock in foreig n markets.ANSWER: B19. The main participants in the international money market are:A) con sumers.B) small firms.C) large corporati ons.D) small Europea n firms n eedi ng Europea n curre ncies for intern ati onal trade.ANSWER: C20.LIBOR is: 同业拆借利率A)the in terest rate com monly charged for loa ns betwee n ban ks.B)the average inflation rate in European countries.C)the maximum loa n rate ceili ng on loa ns in the intern ati onal money market.D)the maximumdeposit rate ceiling on deposits in the international money market.E)the maximum in terest rate offered on bonds that are issued in London.ANSWER: A21. A syn dicated Eurocredit loa n:A)represe nts a loa n by a sin gle bank to a syn dicate of corporati ons.B)represe nts a loa n by a si ngle bank to a syn dicate of country gover nmen ts.C)represe nts a direct loa n by a syn dicate of oil-produci ng exporters to a less developedcoun try.D)represe nts a loa n by a group of banks to a borrower.E) A and BANSWER: D22.The international money market is primarily served by:A)the gover nments of Europea n coun tries, which directly in terve ne in foreig ncurre ncymarkets.B)gover nment age ncies such as the Intern atio nal Mon etary Fund that enhance developme nt of coun tries.C)several large banks that accept deposits and provide loans in various currencies.D)small banks that convert foreig n curre ncy for tourists and bus in ess visitors.ANSWER: C。

国际金融中英文版答案)

国际金融中英文版Chapter 2:Payments among NationsSingle-Choice QuestionsA country’s balance of payments records: 一个国家的国际收支平衡记录了 BThe value of all exports of goods and services from that country for a period of time.All flows of value between that country’s residents and residents of the rest of the world during a period of time.在一定时间段里,一个国家居民的资产和其它世界居民资产的流动All flows of financial assets that cross that country’s borders during a perio d of time.All flows of goods into that country during a period of time.A credit item in the balance of payments is: 在国际收支平衡里的贷项是AAn item for which the country must be paid.一个国家必须收取的条款An item for which the country must pay.Any imported item.An item that creates a monetary claim owed to a foreigner.Every international exchange of value is entered into the balance-of-payments accounts __________ time(s). 每一次国际等价交换都记进国际收支帐户２次B1234A debit item in the balance of payments is: 在国际收支平衡中的借项是BAn item for which the country must be paid.An item for which the country must pay.一个国家必须支付的条款Any exported item.An item that creates a monetary claim on a foreigner.In a nation's balance of payments, which one of the following items is always recorded as a positive entry? D在国际收支中,下列哪个项目总被视为有利条项Changes in foreign currency reserves.Imports of goods and services.Military foreign aid supplied to allied nations.Purchases by foreign travelers visiting the country.国外游客在本国发生的购买The sum of all of the debit items in the balance of payments: 在收支平衡中,所有贷项的总和 BEquals the overall balance.Equals the sum of all credit items.等于所有借项的总和Equals the sum of credit items minus errors and omissions.Which of the following capital transactions are entered as debits in the U.S. balance of payments? 下列哪个资本交易在美国的收支平衡中当作借项？ BA U.S. resident transfers $100 from his account at Credit Suisse in Basel (Switzerland) to his account at a San Francisco branch of Wells Fargo Bank.A French resident transfers $100 from his account at Wells Fargo Bank in San Francisco to his Credit Suisse account in Basel.一个法国居民在旧金山的Fargo Bank用其帐户转帐１００美金到位于巴塞尔的瑞士信贷户口A U.S. resident sells his IBM stock to a French resident.A U.S. resident sells his Credit Suisse stock to a French resident.An increase in a nation's financial liabilities to foreign residents is a: 一个国家对另一个国家金融负债的增加是一种CReserve inflow.Reserve outflow.Capital inflow.资本流入Capital outflow.___A_______ are money-like assets that are held by governments and that are recognized by governments as fully acceptable for payments between them. 官方国际储备资产是一种类似于钱的资产，这种资产由政府掌握并作为政府间的一种支付手段得到充分认可.Official international reserve assets 官方国际储备资产Unofficial international reserve assetsOfficial domestic reserve assetsUnofficial domestic reserve assetsWhich of the following is considered a capital inflow? 下列哪项被视为资本流入 AA sale of U.S. financial assets to a foreign buyer.美国一金融资产卖给一外国买家A loan from a U.S. bank to a foreign borrower.A purchase of foreign financial assets by a U.S. buyer.A U.S. citizen’s repayment of a loan from a foreign bank.In a country’s balance of payments, which of the following transactions are debits?一个国家的收支平衡表中,哪个交易属于借项？ ADomestic bank balances owned by foreigners are decreased.外国人拥有的国内银行资产的下降Foreign bank balances owned by domestic residents are decreased.Assets owned by domestic residents are sold to nonresidents.Securities are sold by domestic residents to nonresidents.The role of ___D_______ is to direct one nat ion’s savings into another nation’s investments: 资金流的作用是指导一个国家的储蓄进入到另一个国家的投资Merchandise trade flowsServices flowsCurrent account flowsCapital flows资金流Capital account.Current account.经常账目（户）Trade balance.Official reserve balance.The net value of flows of financial assets and similar claims (excluding official international reserve asset flows) is called the: 金融资产和类似的资产（官方国际储备资产流除外）的净值流叫AFinancial account.金融帐Current account.Trade balance.Official reserve balance.The financial account in the U.S. balance of payments includes: 美国国家收支表中的金融帐包括： BEverything in the current account.U.S. government payments to other countries for the use of military bases.美政府采用其它国家军事基地所需支付款项Profits that Nissan of America sends back to Japan.New U.S. investments in foreign countries.ＡU.S. resident increasing her holdings of a foreign financial asset causes a:一个美国居民增持一外国金融资产会引起DCredit in the U.S. current account.Debit in the U.S. current account.Credit in the U.S. capital account.Debit in the U.S. capital account.美国资本帐的借帐A foreign resident increasing her holdings of a U.S. financial asset causes a:一个美国居民增持本国一金融资产会引起 CCredit in the U.S. current account.Debit in the U.S. current account.Credit in the U.S. capital account.美国资本帐的贷帐Debit in the U.S. capital account.A deficit in the current account: 经常帐户中的赤字 ATends to cause a surplus in the financial account.会导致金融帐中的盈余Tends to cause a deficit in the financial account.Has no relationship to the financial account.Is the result of increasing exports and decreasing imports.In September, 2005, exports of goods from the U.S. decreased $3.3 billion to $73.4 billion, and imports of goods increased $3.8 billion to $144.5 billion. This increased the deficit in:20xx年8月,美国商品出口降低了33亿美元,共734亿美元；商品进口上升到1145亿美元,上长了38亿.这样增加了哪个方面的赤字？CThe balance of payments.The financial account.The current account.经常帐户Unilateral transfers.Which of the following would contribute to a U.S. current account surplus? 以下哪项有助于美国现金帐的盈余？ BThe United States makes a unilateral tariff reduction on imported goods.The United States cuts back on American military personnel stationed in Japan.美国削减在日本的军事人员U.S. tourists travel in large numbers to Asia.Which of the following transactions is recorded in the financial account?以下哪个交易会被当作金融帐AA Chinese businessman imports Ford automobiles from the United States.A U.S. tourist spends money on a trip to China.The New York Yankees are paid $10 million by the Chinese to play an exhibition game in Beijing, China.If a British business buys U.S. government securities, how will this be entered in the balance of payments? 如果一英国商人购买了美国政府的债券,那么这个交易在收支平衡表中会被当作是？ CIt will appear in the trade account as an import.It will appear in the trade account as an export.It will appear in the financial account as an increase in U.S. assets held by foreigners.会被当作是外国人所有的美国资产增长It will appear in the financial account as a decrease in U.S. assets held by foreigners.In the balance of payments, the statistical discrepancy or error term is used to: 在收支平衡表中, 统计差异与错误项目会用来确保借帐总和跟贷帐总和一致 AEnsure that the sum of all debits matches the sum of all credits.Ensure that imports equal the value of exports.Obtain an accurate account of a balance-of-payments deficit.Obtain an accurate account of a balance-of-payments surplus.Official reserve assets are: 官方储备资产是 BThe gold holdings in the nation’s central bank.Money like assets that are held by governments and that are recognized by governments as fully acceptable for payments between them. 官方国际储备资产是一种类似于钱的资产，这种资产由政府掌握并作为政府间的一种支付手段得到充分认可Government T-bills and T-bonds.Government holdings of SDR’sGold.Special Drawing Rights.IMF Reserve Positions.Foreign Currencies.外汇（币）The net accumulation of foreign assets minus foreign liabilities is: 海外净资产的积累减去外债等于CNet official reserves.Net domestic investment.Net foreign investment.国外投资净值Net foreign deficit.A country experiencing a current account surplus: 一个国家经历经常帐户的盈余 BNeeds to borrow internationally.Is able to lend internationally.就有能力向外放贷Must also have had a surplus in its "overall" balance.The ___C_______ measures the sum of the current account balance plus the private capital account balance. 官方结算差额是指经常帐户余额的总和加上私人资本帐（B=CA+FA,FA:为非官方投资和储备）Official capital balanceUnofficial capital balanceOfficial settlements balance官方结算差额Unofficial settlements balanceIf the overall balance is in __A________, there is an accumulation of official reserve assets by the country or a decrease in foreign official reserve holdings of the country's assets. 如果综合差额处于盈余，那么会出现本国官方储备资产的积累或者国外官方储备的减少（B=CA+FA,B+OR=0，OR:官方储备金额）Surplus盈余DeficitBalanceForeign handsWhich of the following is the current account balance NOT equal to? 以下哪项不等同于现金帐 DThe difference between domestic product and domestic expenditure.The difference between national saving and domestic investment.Net foreign investment.The difference between government saving and government investment. 政府储蓄与政府投资的差值True/False QuestionsCapital inflows are debits and capital outflows are credits. 资金流入是借项，资金外流是贷项The net flow of financial assets and similar claims is the private current account balance. 金融资产和类似的资产的净值叫经常帐目余额The majority of countries' official reserves assets are now foreign exchange assets, financial assets denominated in a foreign currency that is readily acceptable in international transactions. (T)大部份官方储备资产作为以外汇资产和金融资产为命名的外币在世界上交易与流通.A country's financial account balance equals the country's net foreign investment.一个国家的金融帐差额相当于一个国家的净国外投资A country has a current account deficit if it is saving more than it is investing domestically.一个国家如果在国内的储蓄比投资要大,那么会出现经常账目赤字The official settlements balance measures the sum of the capital account balance plus the public current account balance. 官方结算差额是资金帐户余额的总额加上公共经常帐户余额A nation's international investment position shows its stock of international assets and liabilities at a moment in time. (T)一个国家的国际投资状况反映出它在特定时间里的国际资产股份以及债务情况.A nation is a borrower if its current account is in deficit during a time period. (T)在一段时间内,如果一个国家的经常帐出现赤字,那么它就是借方.A nation is a debtor if its net stock of foreign assets is positive. 如果一个国家的国外资产净储备是正数,那么它是借方（债务方）A transaction leading to a foreign resident increasing her holdings of a U.S. financial asset will be recorded as a debit on the U.S. financial account.如果一项交易引起一外国居民增持美国金融资产的股份,那么这项交易在美国金融帐中会被当作借项A credit item is an item for which a country must pay. 贷项是指一个国家必须还款的条项Gold is a major reserve asset that is currently often used in official reserve transactions. 黄金作为主要的储备资产,常被用在官方储备交易当中.The current account balance is equal to the difference between domestic product and national expenditure.(T)经常项目余额等于国民生产与国民支出的差额In 2007 U.S. households, businesses and government were buying more goods and services than they were producing.(T)____年,美国家庭,商业,政府购买的商品和服务比他们生产（商品和服务）的要多.6。

国际经济学第九版英文课后答案第3单元

国际经济学第九版英文课后答案第3单元*CHAPTER 3(Core Chapter)THE STANDARD THEORY OF INTERNATIONAL TRADE OUTLINE3.1 Introduction3.2 The Production Frontier with Increasing Costs3.2a Illustration of Increasing Costs3.2b The Marginal Rate of Transformation3.2c Reason for Increasing Opportunity Costs and Different Production Frontiers3.3 Community Indifference Curves3.3a Illustration of Community Indifference Curves3.3b The Marginal Rate of Substitution3.3c Some Difficulties with Community Indifference Curves3.4 Equilibrium in Isolation3.4a Illustration of Equilibrium in Isolation3.4b Equilibrium Relative Commodity Prices and Comparative AdvantageCase 3-1: Revealed Comparative Advantage of the United States,the European Union, and Japan3.5 The Basis for and the Gains from Trade with Increasing Costs3.5a Illustration of the Basis for and the Gains from Trade with Increasing Costs3.5b Equilibrium Relative Commodity Prices with Trade3.5c Incomplete SpecializationCase Study 3-2: Specialization and Export Concentration inSelected Countries3.5d Small Country Case with Increasing Costs3.5e The Gains from Exchange and from SpecializationCase Study 3-3: Job Losses in High U.S. Import-Competing IndustriesCase Study 3-4: International Trade and Deindustrialization in the United States,the European Union, and Japan3.6 Trade Based on Differences in TastesAPPENDIX: A3.1 Production Functions, Isoquants, Isocosts and EquilibriumA3.2 Production Theory with Two Nations, Two Commodities and Two FactorsA3.3 Derivation of the Edgeworth Box Diagram and Production FrontiersA3.4 Some Important ConclusionsKey TermsIncreasing opportunity costs Revealed comparative advantage Marginal rate of transformation (MRT) Equilibrium relative commodity price with tradeCommunity indifference curves Incomplete specialization Marginal rate of substitution (MRS) Gains from exchange Autarky Gains from specializationEquilibrium relative commodity price in isolation Deindustrialization Lecture Guide1. In the first lecture of Chapter 3, I would cover Sections 1, 2, and3. Section 2 can becovered quickly, except for 2b, which requires careful explanation because of its subsequentimportance. Careful explanation is also required for 3b. I would assign Problems 1 and 2.2. In the second lecture, I would cover Sections 4, 5a, and 5b. Thisis the basic trade modeland it is essential for the student to master it completely. To this end, I would assign andgrade Problems 3 and 4.3. In the third lecture, I would cover the remainder of the chapter.The topics here representelaborations of the basic trade model. I would assign problems 5, 6, and 7 and go overproblem 7 in class even though its answer is also in the back of the book. I would make theAppendices optional for those students in the class who have had intermediate micro theory.Answer to Problems1. a) See Figure 1.b) The slope of the transformation curve increases as the nationproduces more of X anddecreases as the nation produces more of Y. These reflect increasing opportunity costs asthe nation produces more of X or Y.2. a) See Figure 2.We have drawn community indifference curves as downward or negatively sloped becauseas the community consumes more of X it will have to give up some of Y to remain onthe same indifference curve.b)The slope measures how much of Y the nation can give up byconsuming one more unitof X and still remain at the same level of satisfaction; the slope declines because the moreof X and the less of Y the nation is left with, the less satisfaction it receives fromadditional units of X and the more satisfaction it receives from each retained unit of Y.c) III > II to the right of the intersection, while II > III to the left.This is inconsistent because an indifference curve should show a given level of satisfaction.Thus, indifference curves cannot cross.3. a) See Figure 3 on page 22.b) Nation 1 has a comparative advantage in X and Nation 2 in Y.c) If the relative commodity price line has equal slope in both nations.4. a) See Figure 4.b) Nation 1 gains by the amount by which point E is to the right andabove point A andNation 2 by the excess of E' over A'. Nation 1 gains more from trade because the relativeprice of X with trade differs more from its pretrade price than for Nation 2.5. a) See Figure 5. In Figure 5, S refers to Nation 1's supplycurve of exports of commodity X, while D refers to Nation 2's demand curve for Nation 1's exports of commodity X. D and S intersect at point E, determining the equilibrium P B=Px/Py=1 and the equilibrium quantity of exports of 60X.b) At Px/Py=1 1/2 there is an excess supply of exports of R'R=30Xand Px/Py falls towardequilibrium Px/Py=1.c) At Px/Py=1/2, there is an excess demand of exports of HH'=80X and Px/Py risestoward Px/Py=1.6. The Figure in Problem 5 is consistent with Figure 3-4 in the text.From the left panel ofFigure 3-4, we see that Nation 1 supplies no exports of commodity X at Px/Py=1/4 (pointA). This corresponds with the vertical or price intercept of Nation 1's supply curve ofexports of commodity X (point A).The left panel of Figure 3-4 also shows that at Px/Py=1, Nation 1 is willing to export 60X(point E). The same is shown by Nation 1's supply curve of exports of commodity X.The other points on Nation 1's supply curve of exports in the figure of Problem 5 can alsobe derived from the left panel of Figure 3-4, but this is shown in Chapter 4 with offercurves.Nation 2's demand curve for Nation 1's exports ofcommodity X could be derived from theright panel of Figure 3-4, as shown in Chapter 4. What is important isthat we can use theD and S figure in Problem 5 to explain why the equilibrium relative commodity price withtrade is Px/Py=1 and why the equilibrium quantity traded of commodity X is 60 units inFigure 3-4.7. See Figure 6 on page 24.The small nation will move from A to B in production, exports X in exchange for Y so asto reach point E > A.8. a) The small nation specializes in the production of commodityX only until its opportunitycost and relative price of X equals P W. This usually occurs before the small nation hasbecome completely specialized in production.b) Under constant costs, specialization is always complete for the small nation.9. a) See Figure 7.b) See Figure 8.10. If the two community indifference curves had also been identical in Problem 9 the relativecommodity prices would also have been the same in both nations in the absence of trade andno mutually beneficial trade would be possible11. If production frontiers are identical and the communityindifference curves different in thetwo nations, but we have constant opportunity costs, there would be no mutually beneficialtrade possible between the two nations12. See Figure 1113. It is true that Mexico's wages are much lower than U.S. wages (about one fifth), but laborproductivity is much higher in the United States and so labor costs are not necessarilyhigher than in Mexico. In any event, trade can still be based on comparative advantage.App. 1. See Figure 12Commodity X is the L-intensive commodity in Nation 2 (as in Nation 1) because the production contract curve bulges toward the L- axis or is everywhere to the left of the diagonal.App. 2. Since L and K are released from the production of X in a higher ratio than are absorbed in the production of Y, wages fall in Nation 2. This leads to the substitution of L for K in the production of X and Y, so that the K/L ratio falls in the production of both commodities.Multiple-Choice Questions1. A production frontier that is concave from the origin indicates that thenation incursincreasing opportunity costs in the production of:a. commodity X onlyb. commodity Y only*c. both commoditiesd. neither commodity2. The marginal rate of transformation (MRT) of X for Y refers to:a. the amount of Y that a nation must give up to produce each additional unit of Xb. the opportunity cost of Xc. the absolute slope of the production frontier at the point of production*d. all of the above3. Which of the following is not a reason for increasing opportunity costs:*a. technology differs among nationsb. factors of production are not homogeneousc. factors of production are not used in the same fixed proportion in the production of all commoditiesd. for the nation to produce more of a commodity, it must use resources that are less and less suited in the production of the commodity4. Community indifference curves:a. are negatively slopedb. are convex to the originc. should not cross*d. all of the above5. The marginal rate of substitution (MRS) of X for Y in consumption refers to the:a. amount of X that a nation must give up for one extra unit of Y and still remain on the same indifference curve*b. amount of Y that a nation must give up for one extra unit of X and still remain on the same indifference curvec. amount of X that a nation must give up for one extra unit of Y to reach a higher indifference curved. amount of Y that a nation must give up for one extra unit of X to reach a higher indifference curve6. Which of the following statements is true with respect to the MRS of X for Y?a. It is given by the absolute slope of the indifference curveb. declines as the nation moves down an indifference curvec. rises as the nation moves up an indifference curve*d. all of the above7. Which of the following statements about community indifference curves is true?a. They are entirely unrelated to individuals' community indifference curvesb. they cross, they cannot be used in the analysis*c. the problems arising from intersecting community indifference curves can be overcome by the application of the compensation principled. all of the above.8. Which of the following is not true for a nation that is in equilibrium in isolation?*a. It consumes inside its production frontierb. it reaches the highest indifference curve possible with its production frontierc. the indifference curve is tangent to the nation's production frontierd. MRT of X for Y equals MRS of X for Y, and they are equal to Px/Py9. If the internal Px/Py is lower in nation 1 than in nation 2 without trade:a. nation 1 has a comparative advantage in commodity Yb. nation 2 has a comparative advantage in commodity X*c. nation 2 has a comparative advantage in commodity Yd. none of the above10. Nation 1's share of the gains from trade will be greater:a. the greater is nation 1's demand for nation 2's exports*b. the closer Px/Py with trade settles to nation 2's pretrade Px/Pyc. the weaker is nation 2's demand for nation 1's exportsd. the closer Px/Py with trade settles to nation 1's pretrade Px/Py11. If Px/Py exceeds the equilibrium relative Px/Py with tradea. the nation exporting commodity X will want to export more of X than at equilibriumb. the nation importing commodity X will want to import less of X than at equilibriumc. Px/Py will fall toward the equilibrium Px/Py*d. all of the above12. With free trade under increasing costs:a. neither nation will specialize completely in productionb. at least one nation will consume above its production frontierc. a small nation will always gain from trade*d. all of the above13. Which of the following statements is false?a.The gains from trade can be broken down into the gains from exchange and the gains from specializationb. gains from exchange result even without specialization*c. gains from specialization result even without exchanged. none of the above14. The gains from exchange with respect to the gains fromspecialization are always:a. greaterb. smallerc. equal*d. we cannot say without additional information15. Mutually beneficial trade cannot occur if production frontiers are:a. equal but tastes are notb. different but tastes are the samec. different and tastes are also different*d. the same and tastes are also the same.。

国际公司金融习题答案--第三章

第三章课后习题参考答案1. 假设中国银行英镑的报价是9.9 144-56，你计划把20 000元人民币换成英镑，以支付你即将赴英旅游的费用。

你能从中行换回多少英镑？银行将用较高的汇率出售英镑，则我能换回￡20 000/￥9.9156/￡=2017.02￡2. 美元和英镑即期汇率和90天远期汇率分别是＄1.5 696/￡和＄1.5 642/￡，问英镑的升水或贴水是多少？已知英镑贴水，英镑的贴水率为（1.5 642/1.5696-1）×360/90×100%=-1.3 761%3. 德意志银行欧元与美元的即期报价和90天远期报价分别为：＄1.2536-48，18-26。

（1）请问：90天远期美元的完整报价是多少？（2）90天远期是升水还是贴水？是多少？（3）即期和远期汇率的买卖差价以百分比表示是多少？(1)$1.2554/€-$1.2574/€(2)以买入价表示，美元升水，（1.2554/1.2536-1）×360/90×100%=0.5743%以卖出价表示，美元升水，（1.2574/1.2548-1）×360/90×100%=0.8288%(3)即期汇率：（1.2548-1.2536）/1.2536×100%=0.0957%远期汇率：（1.2574-1.2554）/1.2554×100%=0.1593%4. 假如欧元在伦敦的报价为€1.1 816-28/￡,英镑在法兰克福的报价为￡0.8646-58/€，请问两地是否存在无风险套汇机会？请详述可知欧元在法兰克福的报价为€1.1550-1.1566/￡，与欧元在伦敦的报价不同，则存在套汇机会。

先用100英镑在伦敦买入欧元，买入100×1.1816=118.16€，再在法兰克福市场上卖出欧元买入英镑，得到118.16/1.1566=102.16￡，净收入为2.16￡.5.已知：香港市场新加坡元的报价为：HK$6.162 7/S$新加坡市场韩元的报价为：Won919.12/S$韩国市场港元的报价为：Won151.14/HK$问：三角套汇是否有利可图？若有，用100万港元进行无风险套汇，可得利多少？三角套汇有利可图，在韩国市场上出售港币买入韩元，得到100×151.14=15 114Won，在新加坡市场上出售韩元买入新加坡元15 114/919.12=16.444S$，最后在香港市场上出售新加坡元买入港币，16.444×6.1627=101.3394万HK$，获利13394HK$。

国际金融英文版课后答案

国际⾦融英⽂版课后答案International Finance 国际⾦融Notes to the answers:1、All the terms can be found in the text.2、The discussions can be attained by reading the original text.Chapter 1Answers:II. T T F F F T TIII. 1. reserve currency 2. appreciate 3. was pegged to 4. deficit 5. fixed exchange rates 6. floating exchange rates 7. depreciate 8. market forcesIV. 1. Confidence in the ability of the U.S. to redeem dollars for gold began to fall as potential claims against the dollar increased and U.S. gold reserves fell.2.Under the fixed exchange rate system, the value of the dollar was tied to gold through itsconvertibility in to gold at the U.S. Treasury, and other nations’ currencies were tied to the dollar by the maintenance of a fixed rate of exchange.3.IMF has adjusted its role in the exchange rate system in view of the development of thesituation.4.After the collapse of the Bretton Woods System, the task of “rigorous monitoring”theexchange rate policy of member countries fell on the shoulder of IMF.5.Under normal conditions the stabilizing operations were sufficient to contain short-runfluctuations in a currency’s price within the required bounds of 1% of par value and thereby maintain a system of fixed exchange rates.Chapter 2Answers:I. liquid, turnover, due to, hedge, cross trading, electronic broking, outright forwards,Over-the-counter, futures and options, derivatives, remainder.II.. 1. The fundamental changes occurred in post-war world economy. The international flow of commodities, capital and labor is intensifying, thus leading to integration of international markets.1.Often referred to as “financial institutions with a soul”, credit unions are member-ownedcooperatives that offer checking accounts, savings accounts, credit cards, and consumer loans.2.If you think the price of gold will rise, you can buy a most simple kind of financial derivativewhich is called “futures”. If by that time the price really goes up, then you make a gain. But if you make a wrong guess and the price declines, then you suffer a loss.3.Financial derivatives are financial commodities deriving from such spot market products asinterest rate or bond, foreign exchange or foreign exchange rate and stock or stock indexes.There are mainly three types of derivatives: futures, options and swaps, each of which involves a mix of financial contracts. /doc/c3db77c2f68a6529647d27284b73f242336c31b8.html panies and investment funds are using basic currency futures and currency options, onesthat are regarded as traditional hedging products for investors who want to protect their international assets from sharp gains and declines in currency prices.Chapter 3Answers：II. 1. deposit accounts 2. securitization 3. Deregulation 4. consolidation 5. portfolio 6. thrift institutions 7. listing 8. liquidity 9. banking supervision 10. Credit riskIII. 1. Depository institutions 2. commercial banks 3. credit analysis 4. working capital 5. consolidation 6. financing 7. moral hazard 8. Bank supervision and regulation 9. Credit risk 10. Liquidity riskIV. 1. If a bank’s base rate was below money market rates, a customer could borrow from a bank and lend these funds to the money market, thus making a profit on the deal.2.Financing of international trade is one of the basic functions of a commercial bank. Not onlydoes it father deposits (demand, time and savings accounts), but it also grants loans.3.If you have a credit card, you buy a car, eat a dinner, take a trip,a nd even get a haircut bycharging the cost to your account.4.As the central bank and under the leadership of the State Council, the People’s Bank ofChina will formulate and implement monetary policies, execute supervision and control power over the banking industry. 5.One of major function of the central bank is the supervision of the clearing mechanism. Areliable clearing mechanism which can settle inter-bank transaction with high efficiency is crucial to a well-operated financial system.Chapter 4 Answers:II. 1．integrity 2. pretext 3. released 4. produce 5. facilities 6. obliged 7. alleging 8. Claims 9. cleared 10. deliveryIII. 1. in favor of 2. consignment 3. undertaking, terms and conditions 4. cleared 5. regardless of 6. obliged to 7. undervalue arrangement 8. on the pretext of 9. refrain from 10. hinges onIV. 1. The objective of documentary credits is to facilitate international payment by making use of the financial expertise and credit worthiness of one or more banks.2.In compliance with your request, we have effected insurance on your behalf and debited youraccount with the premium in the amount of $1000.3.When an exporter is trading regularly with an importer, he will offer open account terms.4.Exporters usually insist on payment by cash in advance when they are trading with oldcustomers.5.Cash in advance means that the exporter is paid either when the importer places his order orwhen the goods are ready for shipment.Chapter 5.II．1. b 2. c 3. c 4. a 5. b 6. b 7. a 8. cIII. 1. guaranteed 2. without recourse 3. defaults 4. on the buyer’s account 5. is equivalent to 6. in question 7. devaluation 8. validity 9. discrepancy 10. inconsistent withChapter 6Answers:II. 1. open account, creditworthiness 2. demand 3. draw on, creditor 4. protest 5. schedule, discrepancies 6. acceptance 7.drawee 8. guranteedIII. 1. collecting bank 2. tenor 3. the proceeds 4. protest 5. deferred payment 6. presentation 7. the maturity date 8. a document of title 9. the shipping documents 10. transshipmentIV. 1. Documentary collection is a method by which the exporter authorizes the bank to collect money from the importer.2.When a draft is duly presented for acceptance or payment but the acceptance or paymentis refused, the draft is said to be dishonored.3.In the international money market, draft is a circulative and transferable instrument.Endorsement serves to transfer the title of a draft to the transferee.4. A clean bill of lading is favored by the buyer and the banks for financial settlementpurposes.5.Parcel post receipt is issued by the post office for goods sent by parcel post. It is both areceipt and evidence of dispatch and also the basis for claim and adjustment if there is any damage to or loss of parcels. Chapter 7II. financing, discounting, factoring, forfaiting, without recourse, accounts receivable, factor, trade obligations, promissory notes, trade receivables, specialized.III. 1. a cash flow disadvantage 2. without recourse 3. negotiable instruments 4. promissory notes 5. profit margin 6. at a discount, maturity, credit risk 7. A bill of exchange, A promissory noteIV. 1. When a bill is dishonored by non-acceptance or by non-payment, the holder then has an immediate right of recourse against the drawer and the endorsers.2.If a bill of lading is made out to bearer, it can be legally transferred without endorsement.3.The presenting bank should endeavor to ascertain the reasons non-payment ornon-acceptance and advise accordingly to the collecting bank.4.Any charges and expenses incurred by banks in connection with any action for protection ofthe goods will be for the account of the principal.5.Anyone who has a current account at a bank can use a cheque.Chapter EightStructure of the Foreign Exchange Market外汇市场的构成1. Key Terms1）foreign exchange：“Foreign exchange” refers to money denomi nated in the currency of anothernation or group of nations.2）payment“payment”is the transmission of an instruction to transfer value that results from a transaction in the economy.3）settlement“set tlement” is the final and unconditional transfer of the value specified in a payment instruction.2. True or False1) true 2) true 3) true 4) true1)Tell the reasons why the dollar is the market's most widely tradedcurrency?key points: U.S.A economic background; the leadership of USD in the world economy ; the role it plays in investment , trade, etc.2)What kind of market is the foreign exchange market?Make reference to the following parts:（8.7 The Market Is Made Up of An International Network of Dealers）Chapter 9Instruments交易⼯具1. Key Terms1) spot transactionA spot transaction is a straightforward (or “outright”) exchange of one currency for another. The spot rate is the current market price, the benchmark price.Spot transactions do not require immediate settlement, or payment “on the spot.” By convention, the settlement date, or “value date,” is the second business day after the “deal date” (or “trade date”) on which the transaction is agreed to by the two traders. The two-day period provides ample time for the two parties to confirm the agreement and arrange the clearing and necessary debiting and crediting of bank accounts in various international locations.2) American termsThe phrase “American terms” means a direct quote from the point of view of someone located in the United States. For the dollar, that means that the rate is quoted in variable amounts of U.S. dollars and cents per one unit of foreign currency (e.g., $1.2270 per Euro).3) outright forward transactionAn outright forward transaction, like a spot transaction, is a straightforward single purchase/ sale of one currency for another. The only difference is that spot is settled, or delivered, on a value date no later than two business days after the deal date, while outright forward is settled on any pre-agreed date three or more business days after the deal date. Dealers use the term “outright forward” to make clear that it is a single purchase or sale on a future date, and not part of an “FX swap”.4) FX swapAn FX swap has two separate legs settling on two different value dates, even though it is arranged as a single transactionand is recorded in the turnover statistics as a single transaction. The two counterparties agree to exchange two currencies at a particular rate on one date (the “near date”) and to reverse payments, almost always at a different rate, on a specified subsequent date (the “far date”). Effectively, it is a spot transaction and an outright forward transaction going in opposite directions, or else two outright forwards with different settlement dates, and going in opposite directions. If both dates are less than one month from the deal date, it is a “short-dated swap”; if one or both dates are one month or more from the deal date, it is a “forward swap.”5) put-call parity“Put-call parity” says that the price of a European put (or call) option can be deduced from the price of a European call (or put) option on the same currency, with the same strike price and expiration. When the strike price is the same as the forward rate (an “at-the-money” forward), the put and the call will be equal in value. When the strike price is not the same as the forward price, the difference between the value of the put and the value of the call will equal the difference in the present values of the two currencies.2. True or False1) true 2) true 3) true3. Cloze1) Traders in the market thus know that for any currency pair, if the basecurrency earns a higher interest rate than the terms currency, the currency will trade at a forward discount, or below the spot rate; and if the base currency earns a lower interest rate than the terms currency, the base currency will trade at a forward premium, or above the spot rate. Whichever side of the transaction the trader is on, the trader won't gain (or lose) from both the interest rate differential and the forward premium/discount. A trader who loses on the interest rate will earn the forward premium, and vice versa.2) A call option is the right, but not the obligation, to buy the underlyingcurrency, and a put option is the right, but not the obligation, to sell the underlying currency. All currency option trades involve two sides—the purchase of one currency and the sale of another—so that a put to sell pounds sterling for dollars at a certain price is also a call to buy dollars for pounds sterling at that price. The purchased currency is the call side of the trade, and the sold currency is the put side of the trade. The party who purchases the option is the holder or buyer, and the party who creates the option is the seller or writer. The price at which the underlying currency may be bought or sold is the exercise , or strike, price. The option premium is the price of the option that the buyer pays to the writer. In exchange for paying the option premium up front, the buyer gains insurance against adverse movements in the underlyingspot exchange rate while retaining the opportunity to benefit from favorable movements. The option writer, on the other hand, is exposed to unbounded risk—although the writer can (and typically does) seek to protect himself through hedging or offsetting transactions.4. Discussions1)What is a derivate financial instrument? Why is traded?2)Discuss the differences between forward and futures markets in foreigncurrency.3)What advantages do foreign currency futures have over foreigncurrency options?4)What is meant if an option is “in the money”, “out of the money”,or “atthe money”?5)What major international contracts are traded on the ChicagoMercantile Exchange ? Philadelphia Stock Exchange?Chapter 10Managing Risk in Foreign Exchange Trading外汇市场交易的风险管理1. Key Terms1) Market riskMarket risk, in simplest terms, is price risk, or “exposure to (adverse)price change.” For a dealer in foreign exchange, two major elements of market risk are exchange rate risk and interest rate risk—that is, risks of adverse change in a currency rate or in an interest rate.2) VARVAR estimates the potential loss from market risk across an entire portfolio, using probability concepts. It seeks to identify the fundamental risks that the portfolio contains, so that the portfolio can be decomposed into underlying risk factors that can be quantified and managed. Employing standard statistical techniques widely used in other fields, and based in part on past experience, VAR can be used to estimate the daily statistical variance, or standard deviation, or volatility, of the entire portfolio. On the basis of that estimate of variance, it is possible to estimate the expected loss from adverse price movements with a specified probability over a particular period of time (usually a day).3) credit riskCredit risk, inherent in all banking activities, arises from the possibility that the counterparty to a contract cannot or will not make the agreed payment at maturity. When an institution provides credit, whatever the form, it expects to be repaid. When a bank or other dealing institution enters a foreign exchange contract, it faces a risk that the counterparty will not perform according to the provisions of the contract. Between the time of the deal and the time of the settlement, be it a matter of hours, days, or months, there is an extension of credit by both parties and an acceptance of credit risk by the banks or other financial institutions involved. As in the case of market risk, credit risk is one of the fundamental risks to be monitored and controlled in foreign exchange trading. 4) legal risksThere are legal risks, or the risk of loss that a contract cannot be enforced, which may occur, for example, because the counterparty is not legally capable of making the binding agreement, or because of insufficient documentation or a contract in conflict with statutes or regulatory policy.2. True or False1)True 2) true3. Translation1) Broadly speaking, the risks in trading foreign exchange are the same asthose in marketing other financial products. These risks can be categorized and subdivided in any number of ways, depending on the particular focus desired and the degree of detail sought. Here, the focus is on two of the basic categories of risk—market risk and credit risk (including settlement risk and sovereign risk)—as they apply to foreign exchange trading. Note is also taken of some other important risks in foreign exchange trading—liquidity risk, legal risk, and operational risk2) It was noted that foreign exchange trading is subject to a particular form ofcredit risk known as settlement risk or Herstatt risk, which stems in part from the fact that the two legs of a foreign exchange transaction are often settled in two different time zones, with different business hours. Also noted was the fact that market participants and central banks have undertaken considerable initiatives in recent years to reduce Herstatt risk.4. Discussions2)Discuss the way how V AR works in measuring and managing marketrisk?3)Why are banks so interested in political or country risk?4)Discuss other forms of risks which you know in foreign exchange. Chapter 11The Determination of Exchange Rates汇率的决定1. Key Terms1) PPPPurchasing Power Parity (PPP) theory holds that in the long run, exchange rates will adjust to equalize the relative purchasing power of currencies. This concept follows from the law of one price, which holds that in competitive markets, identical goods will sell for identical prices when valued in the same currency.2) the law of one priceThe law of one price relates to an individual product. A generalization of that law is the absolute version of PPP, the proposition that exchange rates will equate nations' overall price levels.3) FEER“fundamental equilibrium exchange rate,” or FEER,envisaged as the equilibrium exchange rate that would reconcile a nation's internal and external balance. In that system, each country would commit itself to a macroeconomic strategy designed to lead, in the medium term, to “internal balance”—defined as unemployment at the natural rate and minimal inflation—and to “external balance”—defined as achieving the targeted current account balance. Each country would be committed to holding its exchange rate within a band or target zone around the FEER, or the level needed to reconcile internal and external balance during the intervening adjustment period.4) monetary approachThe monetary approach to exchange rate determination is based on the proposition that exchange rates are established through the process of balancing the total supply of, and the total demand for, the national money in each nation. The premise is that the supply of money can be controlled by the nation's monetary authorities, and that the demand for money has a stable and predictable linkage to a few key variables, including an inverse relationship to the interest rate—that is, the higher the interest rate, the smaller the demand for money.5) portfolio balance approachThe portfolio balance approach takes a shorter-term view of exchange rates and broadens the focus from the demand and supply conditions for money to take account of the demand and supply conditions for other financial assets as well. Unlike the monetary approach, the portfolio balance approach assumes that domestic and foreign bonds are not perfect substitutes. According to the portfolio balance theory in its simplest form, firms and individuals balance their portfolios among domestic money, domestic bonds, and foreign currency bonds, and they modify their portfolios as conditions change. It is the process of equilibrating the total demand for, and supply of, financial assets in each country that determines the exchange rate.2. True or False1) true 2) true3. Cloze1）PPP is based in part on some unrealistic assumptions: that goods are identical; that all goods are tradable; that there are no transportationcosts, information gaps, taxes, tariffs, or restrictions of trade; and—implicitly and importantly—that exchange rates are influenced only byrelative inflation rates. But contrary to the implicit PPP assumption,exchange rates also can change for reasons other than differences ininflation rates. Real exchange rates can and do change significantly overtime, because of such things as major shifts in productivitygrowth, advances in technology, shifts in factor supplies, changes inmarket structure, commodity shocks, shortage, and booms.2）Each individual and firm chooses a portfolio to suit its needs, based on a variety of considerations—the holder's wealth and tastes, the level ofdomestic and foreign interest rates, expectations of future inflation,interest rates, and so on. Any significant change in the underlying factorswill cause the holder to adjust his portfolio and seek a new equilibrium.These actions to balance portfolios will influence exchange rates.4. Discussions1）How does the purchasing power parity work?2）Describe and discuss one model for forecasting foreign exchange rates.3）Make commends on how good are the various approaches mentioned in the chapter.4）Central banks occasionally intervene in foreign exchange markets. Discuss the purpose of such intervention. How effective is intervention?Chapter 12The Financial Markets⾦融市场1. Key Terms1）money marketThe money market is really a market for short-term credit, or the option to use someone else's money for a period of time in return for the payment of interest. The money market helps the participants in the economic process cope with routine financial uncertainties. It assists in bridging the differences in the timing of payments and receipts that arise in a market economy.2）capital marketMarkets dealing in instruments with maturities that exceed one year are often referred to as capital markets.3）primary marketThe term “primary market” applies to the original issuance of a credit market instrument. There are a variety of techniques for such sales, including auctions, posting of rates, direct placement, and active customer contacts by a salesperson specializing in the instrument4） secondary marketOnce a debt instrument has been issued, the purchaser may be able to resell it before maturity in a “secondary market.”Again, a number of techniques are available for bringing together potential buyers and sellers of existing debt instruments. They include various types of formal exchanges, informal telephone dealer markets, and electronic trading through bids and offers on computer screens. Often, the same firms that provide primary marketing services help to create or “make” secondary markets.5）RPsIn addition to making outright purchases and sales in the secondary market, entities with money to invest for a brief period can acquire a security temporarily, and holders of debt instruments can borrow short term by selling securities temporarily. These two types of transactions are repurchase agree-ments (RPs) and reverse RPs,respectively. In the wholesale market, banks and government securities dealers offer RPs at competitive rates of return by selling securities under contracts providing for their repurchase from one day to several months later6）BAs 7）CDs (reference to 13.1)8） EurodollarEurodollars are U.S. dollar deposits at banking offices in a country other than the United States.9） EurobankEurobanks—banks dealing in Eurodollar or some other nonlocal currency deposits, including foreign branches of U.S. banks — originally held deposits almost exclusively in Europe, primarily London. While most such deposits are still held in Europe, they are also held in such places as the Bahamas, Bahrain, Canada, the Cayman Islands, Hong Kong, Singapore, and Tokyo, as well as other parts of the world.10）LIBOR (reference to 13.2.2 Certificates of Deposit)London inter-bank offer rate11）mortgage-backed securities12）Eurobond market (details make reference to13.3.3 )The Eurobond market, centered in London, is an offshore market in intermediate- and long-term debt issues. It serves as a source of capital for multinational corporations and for foreign governments. It developed after the United States instituted the interest equalization tax in 1963 to stem capital outflows inspired by relatively low U.S. interest rates.2. True or False1) true 2) true 3) true3. Discussions1) Describe the characteristics of Interest Rate Swap and the role of it in thebank-related financial market.2) What risks are encountered in the swaps markets?3) Discuss one or two specific examples of derivative products and their use.4. Translations1) Markets dealing in instruments with maturities that exceed one year are often referred to as capital markets, since credit to finance investments in new capital would generally be needed for more than one year. The time division is arbitrary. A long-term project can be started with short-term credit, with additional instruments may need to be renewed before a project is completed. Debt instruments that differ in maturity share other characteristics. Hence, the term “capital market” could be –and occasionally is applied to some shorter maturity transactions.2) The secondary market for Treasure securities consists of a network of dealers, brokers, and investors who effect transactions either by telephone or electronically. Telephone trades are generally between dealers and their customers. Electronics trading is arranged through screen-based systems provided by some of the dealers to their customers. It allows selected trades to take place without a conversation. When dealers trade with each other, they generally use brokers. Brokers provide information on screen, but the final trades are made by telephone.Chapter 13Concepts of Financial Assets Value⾦融资产价值的概念1. Key Terms1) absolute measure of valueAn absolute measure of value is used when one must compare it to a nominal amount: purchase price, amount to invest, target sum of money to raise2) relative measure of valueA relative measure of rate of return is more convenient to use when onewishes to compare one financial asset to a set of numerous alternative assets. A rate of return is the most commonly used relative measure of value.3) discountingFuture benefits must be discounted (or converted) to their present (or today's) value, before they are summed. Discounting is part of the study of time value of money, or actuarial mathematics, and a complete treatment of it can be found in specialized textbook.4) time value of moneyTime value of money studies how amounts of money are made equivalent over time. Converting amounts today into their future equivalent consists in adding interest to principal, i.e. compounding. Converting amounts in the future into today's equivalent consists of charging an interest, i.e. discounting. Thus, discounting is the exact inverse of compounding.5) FV 6) PV 7) annuity8) short term securitiesShort term securities (i.e. securities with maturity less than one year) are sold at a discount (i.e. nominal value less the interest to be earned over the remaining number of days to maturity). There is no coupon, and no additional benefits such as conversion right, but there may be a penalty for early redemption in the case of some bank certificates of deposit.9) P/E ratio (make reference to 15.5.3 --Earnings Multiple or P/E Ratio)Another approach which is used as a short-cut by a large number of investors, is the earnings multiple. It is sometimes referred to as earnings multiplier, and it is most commonly known as price-to-earnings or P/E ratio. In many instances, the approach, rather than being an oversimplification, can be an improvement over the previous format. In its most common presentation, the idea is that the price P of a share should be a multiple m of its earnings per share E. The multiple m is an industry average because it is assumed that all companies in an industry face similar marketing, technological and resource challenges, and thus, should have similar organizational and production patterns.10) intrinsic valueintrinsic value, or difference between market price of the underlying stock and strike price (which is also known as exercise price because it is the price at which an option holder can buy from or sell to the option writer the underlying stock through the options exchange)。

(完整word版)托马斯国际金融课后习题答案解析

Suggested answers to questions and problems（in the textbook）Chapter 22. Disagree, at least as a general statement。

One meaning of a current accountsurplus is that the country is exporting more goods and services than it isimporting. One might easily judge that this is not good-the country is producing goods and services that are exported, but the country is not at the same timegetting the imports of goods and services that would allow it do moreconsumption and domestic investment. In this way a current account deficitmight be considered good—the extra imports allow the country to consume and invest domestically more than the value of its current production。

Anothermeaning of a current account surplus is that the country is engaging in foreign financial investment—it is building up its claims on foreigners, and this adds to national wealth。

国际金融英文习题Chapter_3

INTERNATIONAL FINANCEAssignment Problems (3) Name: Student#: I. Choose the correct answer for the following questions (only ONE correct answer) (2 credits for each question, total credits 2 x 25 = 50)1. Interbank quotations that include the United States dollars are conventionally given in __________, which state the foreign currency price of one U.S. dollar, such as a bid price of SFr 0.85/$.A. indirect quoteB. direct quoteC. American quoteD. European quote2. The spot exchange rate published in financial newspapers is usually the __________.A. nominal exchange rateB. real exchange rateC. effective exchange rateD. equilibrium exchange rate3. The foreign exchange refers to the __________.A. foreign bank notes and coinsB. demand deposits in foreign banksC. foreign securities that can be easily cashedD. all of the above4. The functions of the foreign exchange market come down to __________.A. converting the currency of one country into the currency of anotherB. providing some insurance against the foreign exchange riskC. making the foreign exchange speculation easyD. Only A and B are true.5. Which of the following is NOT true regarding the foreign exchange market?A. It is the place through which people exchange one currency for another.B. The exchange rate nowadays is mainly determined by the market forces.C. Most foreign exchange transactions are physically completed in this market.D. All of the above are true.6. The world largest foreign exchange markets are __________ respectively.A. London, New York and TokyoB. London, Paris and FrankfurtC. London, Hong Kong and SingaporeD. London, Zurich and Bahrain7. The foreign exchange market is NOT efficient because __________.A. monetary authorities dominate the foreign exchange market and everybody knows that by definition, central banks are inefficientB. commercial banks and other participants of the market do not compete with one another due to the fact that transaction takes place around the world and not in a single centralized locationC. foreign exchange dealers have different prices such as bid and ask pricesD. None of the reasons listed are correct because the foreign exchange market is an efficient market8. __________ earn a profit by a bid-ask spread on currencies they buy and sell. __________ on the other hand, earn a profit by bringing together buyers and sellers of foreign exchanges and earning a commission on each sale and purchase.A. Foreign exchange brokers; foreign exchange dealersB. Foreign exchange dealers; foreign exchange brokersC. arbitragers; speculatorsD. commercial banks; central banks9. Most foreign exchange transactions are through the U.S. dollars. If the transaction is expressed as the currencies per dollar, this is known as __________ whereas __________ are expressed as dollars per currency.A. direct quote; indirect quoteB. indirect quote; direct quoteC. European quote; American quoteD. American quote, European quote10. From the viewpoint of a Japanese investor, which of the following would be a direct quote?A. SFr 1.25/€B. $1.55/₤C. ¥ 110/€D. €0.0091/ ¥11. Which of the following is true about the foreign exchange market?A. It is a global network of banks, brokers, and foreign exchange dealers connected by electronic communications system.B. The foreign exchange market is usually located in a particular place.C. The foreign exchange rates are usually determined by the related monetary authorities.D. The main participants in this market are currency speculators from different countries.12. The extent to which the income from individual transactions is affected by fluctuations in foreign exchange values is considered to be _________.A. Translation exposureB. economic exposureC. transaction exposureD. accounting exposure13. Which of the following exchange rates is adjusted for price changes?A. nominal exchange rateB. real exchange rateC. effective exchange rateD. equilibrium exchange rate14. Suppose the exchange rate of the RMB versus U.S. dollar is ¥6.8523/$ now. If the RMB were to undergo a 10% depreciation, the new exchange rate in terms of ¥/$ would be:A. 6.1671B. 7.5375C. 6.9238D. 7.613515. At least in a U.S. MNC’s financial accounting statement, if the value of the euro depreciates rapidly against that of the dollar over a year, this would reduce the dollar value of the euro profit made by the European subsidiary. This is a typical __________.A. transaction exposureB. translation exposureC. economic exposureD. operating exposure16. A Japanese-based firm expects to receive pound-payment in 6 months. The company has a (an) __________.A. economic exposureB. accounting exposureC. long position in sterlingD. short position in sterling17 The exposure to foreign exchange risk known as Translation Exposure may be defined as __________.A. change in reported owner’s equity in consolidated financial statements caused by a change in exchange ratesB. the impact of settling outstanding obligations entered into before change in exchange rates but to be settled after change in exchange ratesC. the change in expected future cash flows arising from an unexpected change in exchange ratesD. All of the above18 When a firm deals with foreign trade or investment, it usually has foreign exchange risk exposure. So if an American firm expects to receive a dollar-paymentfrom a Chinese company in the next 30 days, the U.S. firm has the possible __________.A. economic exposureB. transaction exposureC. translation exposureD. none of the above19. In order to avoid the possible loss because of the exchange rate fluctuations, a firm that has a __________ position in foreign exchanges can __________ that position in the forward market.A. short; sellB. long; sellC. long; buyD. none of the above20. A forward contract to deliver Japanese yens for Swiss francs could be described either as __________ or __________,A. selling yens forward; buying francs forwardB. buying francs forward; buying yens forwardC. selling yens forward; selling francs forwardD. selling francs forward; buying yens forward21. Dollars are trading at S0SFr/$=SFr0.7465/$ in the spot market. The 90-day forward rate is F1SFr/$=SFr0.7432/$. So the forward __________ on the dollar in basis points is __________:A. discount, 0.0033B. discount, 33C. premium, 0.0033D. premium, 3322. If the spot rate is $1.35/€, 3-month forward rate is $1.36/€, which of the following is NOT true?A. euro is at forward premium by 100 points.B. dollar is at forward discount by 100 points.C. dollar is at forward discount by 55 points.D. euro is at forward premium by 2.96% p.a.23. If the spot C$/$ rate is 1.0305/15, forward dollar is 25/30 premium, the outright forward quote in American term should be __________.A. 1.0330 – 1.0345B. 1.0280 – 1.0285C. 0.9681 – 0.9667D. 0.9728 – 0.972324. If the spot C$/$ rate is 1.0305/15, forward dollar is 25/30 premium, the $/C$ forward quote in terms of points should be __________.A. 30/25B. 25/30C. – (23/28)D. – (28/23)25. The current U.S. dollar exchange rate is ¥85/$. If the 90-day forward dollar rate is ¥90/$, then the yen is selling at a per annum __________ of __________.A. premium; 5.88%B. discount; 5.56%C. premium; 23.52%D. discount; 22.23%II. ProblemsQuestions 1 through 10 are based on the information presented in Table 3.1. (2 credits for each question, total credits 2 x 10 = 20)Table 3.1Country Exchange rate Exchange rate CPI V olume of Volume of (2008) (2009) (2008) exports to U.S imports from U.S. Germany €0.75/$ €0.70/$ 102.5 $200m $350m Mexico Mex$11.8/$ Mex$12.20/$ 110.5 $120m $240mU.S. 105.31. The real exchange rate of the dollar against the euro in 2009 was __________.2. The real exchange rate of the dollar against the peso in 2009 was __________.3. The dollar was __________ against the euro in nominal term by __________.A. appreciated; 6.67%B. depreciated; 6.67%C. appreciated; 7.14%D depreciated; 7.14%4. The Mexican peso was __________ against the dollar in nominal term by __________.A. appreciated; 3.39%B. depreciated; 3.39%C. appreciated; 3.28%D. depreciated; 3.28%5. The volume of the German foreign trade with the U.S. was __________.6. The volume of the Mexican foreign trade with the U.S. was __________.7. Assume the U.S. trades only with the Germany and Mexico. Now if we want to calculate the dollar effective exchange rate in 2009 against a basket of currencies of euro and Mexican peso, the weight assigned to the euro should be __________.8. The weight assigned to the peso should be __________.9. Assume the 2008 is the base year. The dollar effective exchange rate in 2009 was __________.10. Was the dollar generally stronger or weaker in 2009 according to your calculation?11. The following exchange rates are available to you.Fuji Bank ¥80.00/$United Bank of Switzerland SFr0.8900/$Deutsche Bank ¥95.00/SFrAssume you have an initial SFr10 million. Can you make a profit via triangular arbitrage? If so, show steps and calculate the amount of profit in Swiss francs. (8 credits)12. If the dollar appreciates 1000% against the ruble, by what percentage does the ruble depreciate against the dollar? (5 credits)13. As a percentage of an arbitrary starting amount, about how large would transactions costs have to be to make arbitrage between the exchange rates S SFr/$= SFr1.7223/$, S$/￥= $0.009711/¥, and S￥/SFr = ¥61.740/SFr unprofitable? Explain. (7 credits14. You are given the following exchange rates:S￥/A$ = 67.05 – 68.75S￡/A$ = 0.3590 – 0.3670Calculate the bid and ask rate of S￥/￡: (5 credits)15. Suppose the spot quotation on the Swiss franc (CHF) in New York is USD0.9442 –52 and the spot quotation on the Euro (EUR) is USD1.3460 –68. Compute the percentage bid-ask spreads on the CHF/EUR quote. ( 5 credits)Answers to Assignment Problems (3)Part II1. 0.70 x (105.3/102.5) = 0.7 x 1.0273 = 0.71912. 12.2 x (105.3/110.5) = 12.2 x .9529 = 11.62593. B (0.7 /.75) – 1 = -6.67%4. D (1/12.2)/(1/11.8) – 1 = -3.28%5. 5506. 3607. 550/910 = 60.44%8. 360/910 = 39.569. (0.70/0.75)(60.44%) + (12.2/11.8)(39.56%) = .5641 + 0.4090 = .9731 = 97.31%10. weaker, because dollar depreciated by 2.69%.11. Since S￥/$S$/SFr S SFr/￥= 80 x 1/0.8900 x 1/95.00 = 0.946186 < 1, there is an arbitrage opportunity.Steps:①Buy ¥ from Deutsche Bank, SFr10 million x 95.00 = ¥950 million②Buy $from Fuji Bank, $950 m / 80.00 = $11.875 m③Buy SFr from UBS, $11.875 x 0.8900 = SFr10.56875 mProfit (ignoring transaction fees):SFr10.56875 – SFr10 = 0.56875 million = 568,75012. (x – 1) = 1000%; 1/11 – 1 = 90.9%13. S SFr/$ S$/￥S￥/SFr = SFr1.7223/$ x $0.009711/¥ x ¥61.740/SFr = 1.0326If transaction costs exceed $0.0326 (3.26%), the arbitrage is unprofitable.14. Given: S￥/A$ = 67.05 – 68.75S￡/A$ = 0.3590 – 0.3670So, S￥/₤ = 67.05/0.3670 = 182.70 (bid)S￡/₤ = 68.75/0.3590 = 191.50 (ask)15. Given: USD0.9442 – 52/SFrUSD1.3460 – 68/SFrSo, S SRr/€ = 1.3460/0.9452 =1.424 (bid)S SFr/€ = 1.3468/0.9442 = 1.4264 (ask)Bid-ask margin = (1.4264 – 1.424) / 1.4264 = 0.1683%。

金融英语第三章答案

Chapter 3Money MarketExercisesI．Answer the following questions in English．1．How big is the money market?Money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities are traded．The money market is used by participants as a means for borrowing and lending in the short term，from several days to just under a year．Money market securities consist of negotiable certificates of deposit (CDs)，bankers acceptances，U.S．Treasury bills，commercial paper，municipal notes，federal funds and repurchase agreements(repos)．The money market is a subsection of the fixed income market too．2．What are the terms of most T—bills?T-bills are short—term securities that mature in one year or less from their issue date．T—bills are issued with 3 month，6 month，and 1 year maturities．3．Why would a company issue commercial paper?Because For many corporations，borrowing short-term money from banks is often a labored and annoying task．Their desire to avoid banks as much as possible has led to the widespread popularity of commercial paper．4．A money market instrument usually used for import／export payments is known as?Foreign exchange revenue and spending5．What does Eurocurrency encompass?Eurodollars are U.S．dollar—denominated deposits at banks outside of the United States．6．What is a major advantage of money market instruments?Money market is a segment of the financial market in which financial instruments with high liquidity and very short maturities are traded．7．What are Eurodollars?Eurodollars are U.S．dollar—denominated deposits at banks outside of the United States．8．Who can issue commercial paper?Commercial paper is an unsecured，short-term loan issued by a corporation，typically for financing accounts receivable and inventories．Furthermore，typically only companies with high credit ratings and credit worthiness issue commercial paper.II．Fill in the each blank with an appropriate word or expression．1．One of the main differences___between______the money market and the stock ma rk et is t h at mo s t mon e y ma rk e t—securities—tra de ina wf u lly h ig hdenominations．2．The money market is better known__as ______a place for large institutions __and________government to manage their short—term cash needs．3．There are several different instruments___in______the money market，offering different returns____on_______different risks．4．CDs are generally issued____by__________commercial banks but they can be bought through brokerages．They bear a specific maturity date(from 3 months to 5 ye a rs)，a sp ec if ie d inte rest rat e，a nd c an be is suedin___an y______denomination，very similar to bonds．5．The biggest reasons that T—bills are so popular is___because__they are one of the few money market instruments_____that____are affordable to the individual investors．6．A bankers’acceptance is a short—term credit investmentcreated__by__a non—financial firm and guaranteed by a bank to make payment．Acceptances are traded ___at________discounts from face value in the secondary market．Ⅲ．Translate the following sentences into English．1．货币市场上的金融工具包括短期的、可交易的、流动的、低风险的债券。

金融市场与金融机构基础(第3章) 英文版答案

ANSWERS TO QUESTIONS FOR CHAPTER 3(Questions are in bold print followed by answers.)1. Explain the ways in which a depository institution can accommodate withdrawal and loan demand.A depository institution can accommodate loan and withdrawal demands first by having sufficient cash on hand. In addition it can attract more deposits, borrow from the Fed or other banks, and liquidate some of its other assets.2. Why do you think a debt instrument whose interest rate is changed periodically based on some market interest rate would be more suitable for a depository institution than a long-term debt instrument with a fixed interest rate?This question refers to asset-liability management by a depository institution. An adjustable rate can eliminate or minimize the mismatch of maturity risk. As interest rates rise, the institution would have to pay more for deposits, but would also receive higher payments from its loan.3. What is meant by:a.individual bankingb.institutional bankingc.global bankinga.Individual banking is retail or consumer banking. Such a bank emphasizes individualdeposits, consumer loans and personal financial trust services.b.An institutional bank caters more to commercial, industrial and government customers. Itissues deposits to them and tries to meet their loan needs.c. A global bank encompasses many financial services for both domestic and foreign customers.It is much involved in foreign exchange trading as well as the financial of international trade and investment.4.a.What is the Basel Committee for Bank Supervision?b.What do the two frameworks, Basel I and Basel II, published by the BaselCommittee for Bank Supervision, address regarding banking?a.It is the organization that plays the primary role in establishing risk and managementguidelines for banks throughout the world.b.The frameworks set forth minimum capital requirements and standards.5. Explain each of the following:a.reserve ratiob.required reservesa.The reserve ratio is the percentage of deposits a bank must keep in a non-interest-bearingaccount at the Fed.b.Required reserves are the actual dollar amounts based on a given reserve ratio.6. Explain each of the following types of deposit accounts:a.demand depositb.certificate of depositc.money market demand accounta.Demand deposits (checking accounts) do not pay interest and can be withdrawn at any time(upon demand).b.Certificates of Deposit (CDs) are time deposits which pay a fixed or variable rate of interestover a specified term to maturity. They cannot be withdrawn prior to maturity without a substantial penalty. negotiable CDs (large business deposits) can be traded so that the original owner still obtains liquidity when needed.c.Money Market Demand Accounts (MMDAs) are basically demand or checking accounts thatpay interest. Minimum amounts must be maintained in these accounts so that at least a 7-day interest can be paid. Since many persons find it not possible to maintain this minimum (usually around $2500) there are still plenty of takers for the non-interest-bearing demand deposits.7. How did the Glass-Steagall Act impact the operations of a bank?The Glass-Steagall Act prohibited banks from carrying out certain activities in the securities markets, which are principal investment banking activities. It also prohibited banks from engaging in insurance activities.28. The following is the book value of the assets of a bank:Asset Book Value (in millions)U.S. Treasury securities $ 50Municipal general obligationbonds50Residential mortgages 400Commercial loans 200Total book value $700a.Calculate the credit risk-weighted assets using the following information:Asset Risk WeightU.S. Treasury securities 0%Municipal general obligationbonds20Residential mortgages 50Commercial loans 100b.What is the minimum core capital requirement?c.What is the minimum total capital requirement?a.The risk weighted assets would be $410b.The minimum core capital is $28 million (.04X700) i.e., 4% of book value.c.Minimum total capital (core plus supplementary capital) is 32.8 million, .08X410, which is8% of the risk-weighted assets.9. In later chapters, we will discuss a measure called duration. Duration is a measure of the sensitivity of an asset or a liability to a change in interest rates. Why would bank management want to know the duration of its assets and liabilities?a.Duration is a measure of the approximate change in the value of an asset for a 1% change ininterest rates.b.If an asset has a duration of 5, then the portfolio’s value will change by approximately 5% ifinterest rate changes by 100 basis points.3-310.a.Explain how bank regulators have incorporated interest risk into capitalrequirements.b.Explain how S&L regulators have incorporated interest rate risk into capitalrequirements.a.The FDIC Improvement Act of 1991, required regulators of DI to incorporate interest raterisk into capital requirements. It is based on measuring interest rate sensitivity of the assets and liabilities of the bank.b.The OST adopted a regulation that incorporates interest rate risk for S&L. It specifies that ifthrift has greater interest rate risk exposure, there would be a deduction of its risk-based capital. The risk is specified as a decline in net profit value as a result of 2% change in market interest rate.11. When the manager of a bank’s portfolio of securities considers alternative investments, she is also concerned about the risk weight assigned to the security. Why?The Basel guidelines give weight to the credit risk of various instruments. These weights are 0%, 20%, 50% and 100%. The book value of the asset is multiplied by the credit risk weights to determine the amount of core and supplementary capital that the bank will need to support that asset.12. You and a friend are discussing the savings and loan crisis. She states that “the whole mess started in the early 1980s.When short-term rates skyrocketed, S&Ls got killed—their spread income went from positive to negative. They were borrowing short and lending long.”a.What does she mean by “borrowing short and lending long”?b.Are higher or lower interest rates beneficial to an institution that borrows shortand lends long?a.In this context, borrowing short and lending long refers to the balance sheet structure ofS&Ls. Their sources of funds (liabilities) are short-term (mainly deposits) and their uses (assets) are long-term in nature (e.g. residential mortgages).b.Since long-term rates tend to be higher than short-term ones, stable interest rates would bethe best situation. However, rising interest rates would increase the cost of funds for S&Ls without fully compensating higher returns on assets. Hence a decline in interest rate spread or margin. Thus lower rates, having an opposite effect, would be more beneficial.13. Consider this headline from the New York Times of March 26, 1933: “Bankers will fight Deposit Guarantees.” In this article, it is stated that bankers argue that deposit guarantees will encourage bad banking. Explain why.The barrier imposed by Glass-Steagall act was finally destroyed by the Gramm-Leach Bliley Act of 1999. This act modified parts of the BHC Act so as to permit affiliations between banks and insurance underwriters. It created a new financial holding company, which is authorized to4engage in underwriting and selling securities. The act preserved the right of state to regulate insurance activities, but prohibits state actions that have would adversely affected bank-affiliated firms from selling insurance on an equal basis with other insurance agents.14. How did the Gramm-Leach-Bliley Act of 1999 expand the activities permitted by banks?a.Deposit insurance provides a safety net and can thus make depositors indifferent to thesoundness of the depository recipients of their funds. With depositors exercising little discipline through the cost of deposits, the incentive of some banks owners to control risk-taking accrue to the owners. It becomes a “heads I win, tails you lose” situation.b.One the positive side, deposit insurance provides a comfort to depositors and thus attractsdepositors to financial institutions. But such insurance carries a moral hazard, it can be costly and, unless premiums are risk-based, it forces the very sound banks to subsidize the very risky ones.15. The following quotation is from the October 29, 1990 issue of Corporate Financing Week:Chase Manhattan Bank is preparing its first asset-backed debt issue, becomingthe last major consumer bank to plan to access the growing market, Street asset-backed officialsSaid…Asset-backed offerings enable banks to remove credit card or other loanreceivables from their balance sheets, which helps them comply with capitalrequirements.a.What capital requirements is this article referring to?b.Explain why asset securitization reduces capital requirements.a.The capital requirements mentioned are risk based capital as specified under the BaselAgreement, which forces banks to hold minimum amounts of equity against risk-based assets.b.Securitization effectively eliminates high risk based loans from the balance sheet. The capitalrequirements in the case of asset securitization are lower than for a straight loan.16. Comment on this statement: The risk-based guidelines for commercial banks attempt to gauge the interest rate risk associated with a bank’s balance sheet.This statement is incorrect. The risk-based capital guidelines deal with credit risk, not interest-rate risk, which is the risk of adverse changes of interest rates on the portfolio position.17.a.What is the primary asset in which savings and loan associations invest?b.Why were banks in a better position than savings and loan associations toweather rising interest rates?a.Savings and Loans invest primarily in residential mortgages.b.During 1980's, although banks also suffered from the effects of deregulation and rising3-5interest rates, relatively they were in a better position than S&L association because of their superior asset-liability management.618. What federal agency regulates the activities of credit unions?The principal federal regulatory agency is the National Credit Union Administration.3-7。

国际金融第3章(大卫艾特曼)

Chapter 3The International Monetary SystemQuestions3-1. The Gold Standard and the Money Supply. Under the gold standard all national governments promised to follow the “rules of the game.” This meant defending a fixed exchange rate. What did this promise imply about a country’s money supply?A country’s money supply was limited to the amount of gold held by its central bank or treasury.For example, if a country had 1,000,000 ounces of gold and its fixed rate of exchange was100 local currency units per ounce of gold, that country could have 100,000,000 local currencyunits outstanding. Any change in its holdings of gold needed to be matched by a change in thenumber of local currency units outstanding.3-2. Causes of Devaluation. If a country follows a fixed exchange rate regime, what macroeconomic variables could cause the fixed exchange rate to be devalued?The following macroeconomic variables could cause the fixed exchange rate to be devalued:•An interest rate that is too low compared to other competing currencies• A continuing balance of payments deficit•An inflation rate consistently higher than in other countries.3-3. Fixed versus Flexible Exchange Rates. What are the advantages and disadvantages of fixed exchange rates?•Fixed rates provide stability in international prices for the conduct of trade. Stable prices aid in the growth of international trade and lessen risks for all businesses.•Fixed exchange rates are inherently anti-inflationary, requiring the country to follow restrictive monetary and fiscal policies. This restrictiveness, however, can often be a burden to a countrywishing to pursue policies that alleviate continuing internal economic problems, such as highunemployment or slow economic growth.•Fixed exchange rate regimes necessitate that central banks maintain large quantities of international reserves (hard currencies and gold) for use in the occasional defense of the fixedrate. As international currency markets have grown rapidly in size and volume, increasingreserve holdings has become a significant burden to many nations.•Fixed rates, once in place, may be maintained at rates that are inconsistent with economic fundamentals. As the structure of a nation’s economy changes, and as its trade relationshipsand balances evolve, the exchange rate itself should change. Flexible exchange rates allow thisto happen gradually and efficiently, but fixed rates must be changed administratively—usuallytoo late, too highly publicized, and at too large a one-time cost to the nation’s economic health.Chapter 3 The International Monetary System 13 3-4. The Impossible Trinity. Explain what is meant by the term impossible trinity and why it is true.•Countries with floating rate regimes can maintain monetary independence and financial integration but must sacrifice exchange rate stability.•Countries with tight control over capital inflows and outflows can retain their monetary independence and stable exchange rate, but surrender being integrated with the world’scapital markets.•Countries that maintain exchange rate stability by having fixed rates give up the ability to have an independent monetary policy.3-5. Currency Board or Dollarization. Fixed exchange rate regimes are sometimes implemented through a currency board (Hong Kong) or dollarization (Ecuador). What is the difference between the two approaches?In a currency board arrangement, the country issues its own currency but that currency is backed 100% by foreign exchange holdings of a hard foreign currency—usually the U.S. dollar.In dollarization, the country abolishes its own currency and uses a foreign currency, such asthe U.S. dollar, for all domestic transactions.3-6. Emerging Market Exchange Rate Regimes. High capital mobility is forcing emerging market nations to choose between free-floating regimes and currency board or dollarization regimes. What are the main outcomes of each of these regimes from the perspective of emerging market nations?There is no doubt that for many emerging markets a currency board, dollarization, and freely-floating exchange rate regimes are all extremes. In fact, many experts feel that the global financial marketplace will drive more and more emerging market nations towards one of these extremes. As illustrated by Exhibit 3.6 (in the chapter and reproduced here), there is a distinct lack of “middle ground” left between rigidly fixed and freely floating. In anecdotal support of this argument,a poll of the general population in Mexico in 1999 indicated that 9 out of 10 people would preferdollarization over a floating-rate peso. Clearly, there are many in the emerging markets of theworld who have little faith in their leadership and institutions to implement an effective exchange rate policy.14 Eiteman/Stonehill/Moffett • Multinational Business Finance, Twelfth Edition3-7.Argentine Currency Board. How did the Argentine currency board function from 1991 to January 2002 and why did it collapse? Argentina’s currency board exchange regime of fixing the value of its peso on a one-to-one basiswith the U.S. dollar ended for several reasons.• As the U.S. dollar strengthened against other major world currencies, including the euro, during the 1990s, Argentine export prices rose vis-à-vis the currencies of its major trading partners. • This problem was aggravated by the devaluation of the Brazilian real in the late 1990s.• These two problems, in turn, led to continued trade deficits and a loss of foreign exchange reserves by the Argentine central bank. (4) This problem, in turn, led Argentine residents toflee from the peso and into the dollar, further worsening Argentina’s ability to maintain itsone-to-one peg.3-8. The Euro. On January 4, 1999, eleven member states of the European Union initiated theEuropean Monetary Union (EMU) and established a single currency, the euro, which replacedthe individual currencies of participating member states. Describe three of the main ways thatthe euro affects the members of the EMU.The euro affects markets in three ways: (1) countries within the euro zone enjoy cheaper transactioncosts; (2) currency risks and costs related to exchange rate uncertainty are reduced; and (3) allconsumers and businesses both inside and outside the euro zone enjoy price transparency andincreased price-based competition.3-9. Maveri c ks. The United Kingdom, Denmark, and Sweden have chosen not to adopt the euro butrather maintain their individual currencies. What are the motivations of each of these three countries that are also members of the European Union?The United Kingdom chose not to adopt the euro because of the extensive use of the U.K. poundin international trade and financial transactions. London is still the world’s most importantfinancial center. The British are also very proud of their long tradition in financial matters when“Britannia ruled the waves.” They are afraid that monetary and financial matters may eventually migrate to Frankfurt where the European Central Bank is located. The British are also worriedabout continued concentration of decision making in Brussels where the main European Unioninstitutions are located.Denmark is also worried about losing its economic independence as a small country surroundedby big neighbors. Denmark’s currency, the krone, is mostly tied to the euro anyway, so it does not suffer a misalignment with the primary currency unit of the surrounding economies. Sweden has strong economic ties to Denmark, Norway, and the United Kingdom, none of which adopted theeuro so far. Sweden, like the others, is afraid of over-concentration of power within EuropeanUnion institutions.Despite popular fears and a certain amount of nationalism, all three countries have strong forceswithin that would like these countries to adopt the euro. This would usually require popularreferendums, so you may see them adopt the euro in the future.Chapter 3 The International Monetary System 153-10. International Monetary Fund (IMF). The IMF was established by the Bretton WoodsAgreement (1944). What were its original objectives?The IMF was established to render temporary assistance to member countries trying to defend the value of their currencies against cyclical, seasonal, or random occurrences. Additionally it was toassist countries having structural trade problems. More recently it has attempted to help countries, such as Russia, Brazil, Argentina, and Indonesia, to resolve financial crises.3-11. Special Drawing Rights. What are Special Drawing Rights ?The Special Drawing Right (SDR) is an international reserve asset created by the IMF to supplementexisting foreign exchange reserves. It serves as a unit of account for the IMF and other international and regional organizations and is also the base against which some countries peg the exchangerate for their currencies.Defined initially in terms of a fixed quantity of gold, the SDR has been redefined several times.It is currently the weighted value of currencies of the five IMF members having the largest exports of goods and services. Individual countries hold SDRs in the form of deposits in the IMF. These holdings are part of each country’s international monetary reserves, along with official holdings of gold, foreign exchange, and its reserve position at the IMF. Members may settle transactionsamong themselves by transferring SDRs. 3-12. Exchange Rate Regime Classifications. The IMF classifies all exchange rate regimes into eightspecific categories that are summarized in this chapter. Under which exchange rate regime would you classify each of the following countries?a. France: Exchange arrangements with no separate legal tender.b. The United States: independent floating.c. Japan: independent floating.d. Thailand: managed floating with no pre-announced path for the exchange rate. Prior to theAsian Crisis of 1997 it was tied to the U.S. dollar.3-13. The Ideal Currency. What are the attributes of the ideal currency?If the ideal currency existed in today’s world, it would possess three attributes (illustrated inExhibit 3.4), often referred to as The Impossible Trinity .a. Exchange rate stability. The value of the currency would be fixed in relationship to othermajor currencies so traders and investors could be relatively certain of the foreign exchangevalue of each currency in the present and into the near future.b. Full financial integration. Complete freedom of monetary flows would be allowed, so tradersand investors could willingly and easily move funds from one country and currency to anotherin response to perceived economic opportunities or risks.c. Monetary independen c e. Domestic monetary and interest rate policies would be set by eachindividual country to pursue desired national economic policies, especially as they mightrelate to limiting inflation, combating recessions, and fostering prosperity and full employment.The reason that it is termed The Impossible Trinity is that a country must give up one of the three goals described by the sides of the triangle, monetary independence, exchange rate stability, orfull financial integration. The forces of economics do not allow the simultaneous achievement of all three.16 Eiteman/Stonehill/Moffett •Multinational Business Finance, Twelfth Edition3-14. Bretton Woods Failure. Why did the fixed exchange rate regime of 1945–1973 eventually fail?The fixed exchange rate regime of 1945–1973 failed because of widely diverging nationalmonetary and fiscal policies, differential rates of inflation, and various unexpected externalshocks. The U.S. dollar was the main reserve currency held by central banks and was the key to the web of exchange rate values. The United States ran persistent and growing deficits in itsbalance of payments, which required a heavy outflow of dollars to finance the deficits. Eventually the heavy overhang of dollars held by foreigners forced the United States to devalue the dollarbecause the United States was no longer able to guarantee conversion of dollars into its diminishing store of gold.3-15. EU and Euro Expansion. With so many new countries joining the European Union in 2004, when will they officially move to the euro—if ever?In January 2007 two more countries were added to the EU’s growing membership—Bulgaria and Romania. Their entry was little more than two years after the EU had added 10 more countriesto its ranks. As illustrated by Global Finance in Practice 3.2, to date only one of these new12 members has actually adopted the euro. Although all members are expected to eventuallyreplace their currencies with the euro, recent years have seen growing debates and continualpostponements by the new members in moving toward full euro adoption.。

国际金融 Corporate Finance 3rd Berk DeMarzo Solution教材习题全解答案第一章

Chapter 1The Corporation1-1. What is the most important difference between a corporation and all other organizational forms?A corporation is a legal entity separate from its owners.1-2. What does the phrase limited liability mean in a corporate context?Owners’ liability is limited to the amount they invested in the firm. Stockholders are not responsible for any encumbrances of the firm; in particular, they cannot be required to pay back any debts incurred by the firm.1-3. Which organizational forms give their owners limited liability?Corporations and limited liability companies give owners limited liability. Limited partnerships provide limited liability for the limited partners, but not for the general partners.1-4. What are the main advantages and disadvantages of organizing a firm as a corporation?Advantages: Limited liability, liquidity, infinite lifeDisadvantages: Double taxation, separation of ownership and control1-5. Explain the difference between an S corporation and a C corporation.C corporations must pay corporate income taxes; S corporations do not pay corporate taxes, but mustpass through the income to shareholders to whom it is taxable. S corporations are also limited to 75 shareholders and cannot have corporate or foreign stockholders.1-6. You are a shareholder in a C corporation. The corporation earns $2 per share before taxes. Once it has paid taxes it will distribute the rest of its earnings to you as a dividend. The corporate tax rate is 40% and the personal tax rate on (both dividend and non-dividend) income is 30%. How much is left for you after all taxes are paid?´-= is left to pay dividends. Once First, the corporation pays the taxes. After taxes, $2(10.4)$1.20´-=. So, after all the the dividend is paid, personal tax must be paid, which leaves $1.20(10.3)$0.84taxes are paid, you are left with 84¢.1-7. Repeat Problem 6 assuming the corporation is an S corporation.An S corporation does not pay corporate income tax. So it distributes $2 to its stockholders. These stockholders must then pay personal income tax on the distribution. So they are left with ´-=.$2(10.3)$1.401-8. You have decided to form a new start-up company developing applications for the iPhone. Give examples of the three distinct types of financial decisions you will need to make.As the manager of an iPhone applications developer, you will make three types of financial decisions.i. You will make investment decisions such as determining which type of iPhone applicationprojects will offer your company a positive NPV and that your company, therefore, shoulddevelop.ii. You will make the decision on how to fund your iPhone application investments and what mix of debt and equity your company will have.iii. You will be responsible for the cash management of your company, ensuring that your company has the necessary funds to make investments, pay interest on loans, and pay your employees.1-9. When a pharmaceutical company develops a new drug, it often receives patent protection for that medication, allowing it to charge a higher price. Explain how this public policy of providing patent protection might help align the corporation’s interests with society’s interests.Without patent protection, the developer of the drug would be forced to lower prices to compete with generic manufacturers. Because this price competition would lower expected future profits, the developer would be willing to spend much less in R&D to develop the drug initially, and drug innovation would be curtailed.A lternatively, by allowing the drug’s developer to earn higher profits that are commensurate with thevalue of the drug to society, drug developers will find it in their best interests to spend more on R&D, and drug innovation is enhanced. Thus, patent protection can align the corporation’s and society’s interests and provide for more efficient spending on drug R&D.1-10. Corporate managers work for the owners of the corporation. Consequently, they should make decisions that are in the interests of the owners, rather than their own. What strategies are available to shareholders to help ensure that managers are motivated to act this way?Shareholders can do the following.i. Ensure that employees are paid with company stock and/or stock options.ii. Ensure that underperforming managers are fired.iii. Write contracts that ensure that the interests of the managers and shareholders are closely aligned.iv. Mount hostile takeovers.1-11. Suppose you are considering renting an apartment. You, the renter, can be viewed as an agent while the company that owns the apartment can be viewed as the principal. What principal-agent conflicts do you anticipate? Suppose instead that you work for the apartment company.What features would you put into the lease agreement that would give the renter incentives to take good care of the apartment?The agent (renter) will not take the same care of the apartment as the principal (owner), because the renter does not share in the costs of repairing damage to the apartment. To mitigate this problem, having the renter pay a deposit should motivate the renter to keep damages to a minimum. The deposit forces the renter to share in the costs of repairing any problems that they cause.1-12. You are the CEO of a company and you are considering entering into an agreement to have your company buy another company. You think the price might be too high, but you will be the CEO of the combined, much larger, company. You know that when the company gets bigger, your pay and prestige will increase. What is the nature of the agency conflict here and how is it related to ethical considerations?There is an ethical dilemma when the CEO of a firm has the opposite incentives to those of the shareholders. In this case, you (as the CEO) have an incentive to potentially overpay for another company (which would be damaging to your shareholders) because your pay and prestige will improve. 1-13. Are hostile takeovers necessarily bad for firms or their investors? Explain.No. They are a way to discipline managers who are not working in the interests of shareholders.1-14. What is the difference between a public and private corporation?The shares of a public corporation are traded on an exchange (or “over the counter” in an electronic trading system) while the shares of a private corporation are not traded on a public exchange.1-15. Explain why the bid-ask spread is a transaction cost.Investors always buy at the ask and sell at the bid. Since ask prices always exceed bid prices, investors “lose” this difference. It is one of the costs of transacting. Since the market makers take the other side of the trade, they make this difference.1-16. The following quote on Yahoo! Stock appeared on July 9, 2012, on Yahoo! Finance: If you wanted to buy Yahoo!, what price would you pay? How much would you receive if you wanted to sell Yahoo!?You would buy at $15.78 and sell for $15.77.。